A selloff in technology stocks deepened as investors rotated out of industry giants following a blistering rally earlier this year and sought safety in Treasuries and currencies such as the yen. The Kospi Index in South Korea, a bellwether for the artificial intelligence trade, lost 2.8%, putting the benchmark on course for its worst close since April. The drop pushed MSCI Inc.’s regional equities gauge lower for a second day, leaving it around levels last seen in July.
Sentiment also spilled into US equity-index futures, with contracts on the Nasdaq 100 falling 0.1% after the underlying gauge had its worst session since late June. Technology megacaps that powered a four-year bull run in US equities bore the brunt of the selling as earnings from megacap companies added to concerns their rebound since late March had gone too far, too quickly. The group faces fresh tests next week with results from Microsoft Corp., Amazon.com Inc. and Alphabet Inc. landing alongside the Federal Reserve’s policy decision.
The rout drove investors toward bonds. The benchmark 10-year yield, which fell 17 basis points Thursday, traded at 4.96%. The yen, historically a haven asset in times of crisis, outperformed its major counterparts, gaining 0.4% to 156.20 per dollar in early Asian trading. Gold held its losses from Thursday’s session, when it slumped 2.8%. Brent traded just below $113 a barrel after a 4% surge as deadly attacks in Saudi Arabia heightened concerns over supplies.
“Sentiment seems to be shakier these days as investors reconsider AI-related assets,” said Eugene Leow, senior rates strategist at DBS Bank Ltd. Dilin Wu, a strategist at Pepperstone Group Ltd., said the market’s focus is shifting from questioning returns on AI investment toward capital preservation. In Asia, Chinese stocks were also in focus after a $2.4 trillion slide from their May peak pushed them into a bear market.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing