Asian shares sink, with Tokyo down nearly 5% as slumping AI stocks drag world markets lower
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9:34 PM on Thursday, July 16
By ELAINE KURTENBACH
BANGKOK (AP) — Asian shares skidded Friday, with Tokyo’s Nikkei 225 down 5% as heavy selling of computer chipmakers and other AI-related shares dragged markets lower.
South Korean markets were closed Friday, but shares in Taiwan also fell more than 5%.
Stocks related to artificial intelligence have been under pressure for weeks because of worries that their prices have shot too high and that voracious demand for computer memory and processors may not be sustainable if AI ends up not producing as much profit and productivity as promised.
Oil prices surged as fighting in the Middle East intensified, while U.S. futures slipped.
The Nikkei lost 5.8% to 62,945.97, while the Hang Seng in Hong Kong shed 2% to 24,514.29.
The Shanghai Composite index was 1.6% lower at 3,818.59.
In Australia, the S&P/ASX 200 declined 0.7% to 8,775.70.
On Thursday, the S&P 500 fell 0.5% even though nearly three out of every four stocks in the index rose after more of the country’s biggest companies reported better earnings for the latest quarter than analysts expected.
The Dow Jones Industrial Average dipped 0.2%, and the Nasdaq composite lost 1.5%.
Nvidia fell 2.4%, making it the heaviest weight on the index. Other stocks that have benefited from strong demand for AI also sank, giving back some of their stellar gains.
Micron Technology fell 5.6% to shave its gain for the year so far below 199%. SanDisk fell 12.6% but is nevertheless up 494% for the year. Western Digital sank 9.2% but is still up 171% for the year.
Oil prices are near their highest level in a month because of worries that the war with Iran will keep oil tankers out of the Strait of Hormuz and block shipments of crude from the Persian Gulf to customers worldwide.
The price for a barrel of Brent crude, the international standard, rose 1.1% to $85.13 per barrel.
U.S. benchmark crude oil was up 1.3% at $79.95 per barrel.
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AP Business Writers Stan Choe and Matt Ott contributed.
