Asian equities fell Thursday as tech stocks slid following mixed US earnings and rising oil prices. The Nikkei 225 dropped 1.1% while the Hang Seng Index fell 2.4% amid concerns over AI investment sustainability.
Asian equity markets retreated on Thursday as technology stocks resumed a downward trend, dragging broader indices lower. The sell-off was driven by a mixed bag of earnings reports from major Wall Street corporations and a renewed spike in oil prices, which further dampened investor sentiment across the region.
According to market data from Yahoo Finance, the Nikkei 225 in Tokyo fell approximately 1.1 percent to close at 63,917.43, while the Hang Seng Index in Hong Kong dropped 2.4 percent to 23,076.12. The Shanghai Composite also declined by 1.0 percent to 3,674.33. Other major Asian markets, including those in Sydney, Singapore, Taipei, Wellington, Manila, and Jakarta, were also deep in the red.
The decline in Asian tech firms was particularly pronounced, with South Korean chipmakers SK Hynix and Samsung losing around three percent each. In Japan, Kioxia and Tokyo Electron saw similar losses. In Hong Kong, Chinese tech giants Alibaba, JD.com, and Tencent experienced significant declines, reflecting the broader regional weakness in the sector.
The market turmoil followed mixed after-hours earnings releases from US tech leaders. Tesla announced lower profits for the July-September period and cut its capital spending forecast for the year. Conversely, Meta raised its estimates for artificial intelligence spending. Analysts noted that while Meta's figures reinforce the AI investment cycle, the method of financing this growth is becoming a critical concern for investors. Pepperstone's Chris Weston stated that investors are becoming more sensitive to how the next leg of investment is financed and what it means for existing shareholders.
Earlier in the week, disappointing results from Netflix and a weaker-than-expected earnings forecast from semiconductor equipment manufacturer Lam Research had already added to investor unease. Upcoming reports from Microsoft, Amazon, and Alphabet are scheduled for next week, with Apple and Nvidia expected to report in November.
Compounding the equity sell-off was a rise in oil prices, with West Texas Intermediate crude up 1.2 percent at $98.29 per barrel and Brent North Sea crude up 1.3 percent at $110.28 per barrel. The price increase was attributed to deadly attacks in Saudi Arabia by Yemen's Houthis, who struck a Saudi Aramco field and King Fahd International Airport in Dammam. The United States has ordered non-essential embassy staff to leave Saudi Arabia as the kingdom faces sustained attacks, stoking supply worries in the energy market.