Asian stock markets faced large-scale selling on Thursday, with the combined market value of South Korea, Taiwan, and Japan evaporating by nearly $550 billion. Stock prices of chip manufacturers tumbled significantly. The decline stemmed from investors' concerns that stricter data center regulations could slow down AI spending after the Democratic Party won the mid-term elections.
Amid the sharp decline in AI stock prices, the leading cryptocurrency Bitcoin rose by 4%, with a trading price of around $80,242.
South Korea has been hit the hardest.
South Korea experiences its largest decline, with the stock market's market value evaporating by about $203 billion. The KOSPI index tumbles 5.28% to around 5,383 points. Due to the KOSPI 200 futures falling by more than 5%, the South Korean exchange activated a 5-minute programmed trading halt mechanism.
In the past month, KOSPI has fallen by nearly 24%. However, semiconductor giants led this round of selling off. SK Hynix fell by 9.46%, and Samsung Electronics fell by 7.57%.
The Philadelphia Semiconductor Index also fell by 3.1%, hitting a six-month low, further increasing the pressure on Asian chip stocks.
Chip stock selling also occurred in Taiwan and Japan.
Taiwan's stock market lost approximately $182 billion on that day, with the benchmark TAIEX index falling by 3.28% to 42,314 points, hitting a three-month low.
Leading tech stocks led the decline. MediaTek fell by 6.86%, Delta Electronics dropped by 7.38%, and UMC Holdings lost 9%. As investors reduced their exposure to semiconductor stocks, TSMC also fell by 2.5%.
The Japanese stock market lost another $160 billion, with the Nikkei 225 index falling by 3% to around 61,077 points. SoftBank Group declined by 7%, while Tokyo Electron, Kyocera Holdings, and Advantest fell by 9.42%, 13.14%, and 14.71% respectively.
However, some non-technology stocks rose against the trend. Uniqlo rose by 4.72%, and Toyota Motor and Mitsubishi UFJ also recorded increases.
AI Regulatory Concerns Suppress Chip Stocks, Chinese Stocks Rise
The main concern is that after the Democrats take control of both the Senate and the House of Representatives in Congress, they may push for stricter regulations on AI companies and data centers. Investors are worried that new restrictions could lead to delays in data center projects, increased costs for power infrastructure, and slow down AI expenditures.
These concerns have sparked fears of a decline in chip demand in the market, putting pressure on Asian markets that rely on semiconductor exports and American technology companies.
According to the original text, due to the lower dependence on US AI infrastructure spending, Chinese stocks performed relatively well during this round of selling.
Gold, silver, and Bitcoin rise; oil prices fall.
As the stock AI faced heavy selling, gold and silver rebounded, rising by 1.7% and 1% respectively. Meanwhile, Brent crude oil fell by 8.7% to $94.68 per barrel.
Bitcoin also rose by more than 4%, reaching $81,000.
