Asian stocks slide on Thursday

Asian stocks slid on Thursday as rising concerns over the ballooning costs of artificial intelligence investment accelerated a rotation out of technology shares, dragging regional markets lower and unsettling global risk sentiment.

The selloff followed Alphabet’s earnings, which beat expectations but revealed planned capital expenditure of $175 billion to $185 billion this year, far above forecasts. Alphabet shares swung sharply, falling more than 6 per cent at one point before closing the after-hours session just 0.4 per cent lower, while the scale of spending fuelled broader fears about AI valuations. Weak results from Advanced Micro Devices added pressure, with the chipmaker plunging 17 per cent overnight.

MSCI’s broad Asia-Pacific index outside Japan dropped 1.8 per cent, led by a 3.9 per cent fall in South Korea’s KOSPI. Taiwanese shares lost 1.1 per cent, though financials and real estate outperformed, while Japan’s Nikkei slipped 0.7 per cent as defensive sectors such as healthcare and utilities advanced. Investors continued rotating into defensive names, amid anxiety that AI disruptions and heavy capital spending could weigh on corporate profits, with roughly $830 billion wiped off technology stocks since late January.

US stock futures attempted an early rebound in Asia but lost momentum, leaving Nasdaq and S&P 500 futures flat, while EURO STOXX 50 futures edged down 0.3 per cent. Bitcoin fell 3.4 per cent to $70,160, its lowest level since November 2024, as risk appetite weakened.

Markets also digested sharp moves across currencies and bonds, with the Australian dollar sliding 0.5 per cent and US 10 year Treasury yields easing slightly to 4.2656 per cent. Attention now turns to Amazon’s results later in the day, alongside policy meetings at the Bank of England and the European Central Bank, where interest rates are expected to remain unchanged.

Attribution: Reuters