Asian stocks slump as US AI sector selloff deepens
Global markets face volatility as concerns grow over tighter Democratic regulation of the artificial intelligence industry and data centres.
Asian stocks fell from the open on Friday as a post-election rout in chipmakers on Wall Street spread across the region, according to reports by The Economic Times, Moneycontrol and Business Today. The decline follows concerns that Democrats will seek tighter regulation of the artificial intelligence (AI) industry.
In South Korea, the tech-heavy Kospi Index slid as much as 8.8 per cent in early trading, triggering a circuit breaker. Chipmakers Samsung Electronics Co. and SK Hynix Inc. both plunged more than 9 per cent. Japan’s Nikkei 225 Stock Average lost between 5.5 per cent and 6.2 per cent, while the MSCI Asia Pacific Index declined between 2.5 per cent and 2.9 per cent.
On Wall Street, the Nasdaq 100 fell 6.4 per cent, wiping out $2.3 trillion in value during its worst session since March 2020. The S&P 500 Index plunged 4.4 per cent, marking its worst performance since the April 2025 tariff meltdown. A gauge of chip giants tumbled 12 per cent, with Nvidia Corp., Qualcomm Inc. and Arm Holdings Plc among the biggest decliners.
The Philadelphia Semiconductor Index has slumped almost 16 per cent this week. In Texas, newly elected Democratic Governor Gina Hinojosa has called for an immediate moratorium on data centre development, which could leave half of proposed AI data centre additions across the US vulnerable to scrutiny.
Anna Wu, an investment strategist and founder of Floodlines Research, said this is a 'blue trade' panic pricing in policy risk. Michael O’Rourke of JonesTrading noted that investors are de-risking until clarity returns regarding earnings estimates.
Indian equity markets are likely to open lower, with GIFT Nifty futures signalling a fall of 168.50 points, or 0.68 per cent, to 22,775.