HONG KONG: Asian equities went into reverse on Friday (Jun 5) on continued worries about the artificial intelligence trade after disappointing forecasts from chip titan Broadcom, while investors were also keeping a wary eye on stuttering Middle East peace efforts.
After leading several markets to record highs this year, technology firms are facing selling pressure on concerns that the eye-watering sums pumped into AI may have been overdone and stock valuations are too high.
Broadcom on Wednesday sparked concern among traders who have piled into all things AI when its revenue forecast for the third quarter came in below expectations, sparking a sell-off in Wall Street’s Nasdaq as dealers took profits and rotated into other sectors.
And the losses have bled through to Asia, where tech-heavy Seoul and Tokyo – which have led the region’s surge this year – sank from record highs.
South Korean stocks tanked almost 7 per cent at one point on Friday, having dropped 1.8 per cent the day before. The Nikkei in Tokyo was off more than 1 per cent, matching Thursday’s retreat.
The losses come as investors contemplate a coming IPO by Elon Musk’s SpaceX, which is aiming to raise US$75 billion in the biggest initial public offering ever.
The company said in a regulatory filing that it would offer more than 550 million shares at US$135 each next week, which could value the company at US$1.8 trillion.
There were also losses in Hong Kong, Sydney, Singapore and Taipei, though Shanghai, Wellington and Manila edged up.
Jakarta extended losses amid building fears about the state of the Indonesian economy and the rupiah, which have been hammered by surging oil prices.
