Panic gripped Asian stock markets on Friday as technology shares collapsed, triggering a trading halt on South Korea's Kospi index for the third time this week. The benchmark fell 8% before a circuit breaker kicked in, suspending trading for 20 minutes. By the close, the index was down 5.8%.
The turmoil followed Apple's 6% plunge on Thursday after the company announced it would raise iPad and MacBook prices because of soaring computer chip costs. Microsoft also fell after hiking Xbox console prices, citing higher component costs. The moves have stoked fears that rising prices will hit device sales and slow demand for chips.
“Asian stocks plummet as tech sell-off intensifies; South Korea halts trading for third time this week”
“The long term investment case for AI remains compelling, but investors are becoming far more selective about which companies can justify the valuations,” said David Makaryan, senior partner at Alpha Pacific Group. The sell-off reflects a reassessment of tech valuations and profit-taking after months of gains, he added.
Japan’s Nikkei 225 closed more than 4% lower, with SoftBank shares tumbling 12.5%. Other major indexes in Taiwan and mainland China also fell sharply.
The sudden rout has been building as hundreds of billions of dollars spent by big tech firms on artificial intelligence infrastructure come under scrutiny. Analyst Raymond Woo of Kyoto University Innovation Capital noted that the high cost of commercialising AI tools is being passed to consumers, which “naturally raises questions” about whether demand will keep pace with investment and whether current tech stock valuations are realistic.
South Korea’s market has been especially volatile: Friday’s circuit-breaker was the fifth such event this year, with three occurring this week alone. The 20-minute pause prevented deeper losses, but the index still closed sharply down, leaving investors wondering if the worst is over.