Asian equity markets experienced considerable declines as investors offloaded shares linked to artificial intelligence amid rising apprehensions about excessive spending in this sector. The KOSPI index in South Korea tumbled over 11%, Taiwan's main index decreased by 5%, and Japan's Nikkei fell by 2.6%, notwithstanding robust earnings reported by prominent chip producer SK Hynix. Market participants are now attentively anticipating earnings reports from Microsoft and Meta to assess whether AI investments can validate their inflated valuations. In addition, escalating tensions in the Middle East have driven oil prices up by more than 3%, heightening inflation worries as the U.S. Federal Reserve prepares for its upcoming policy announcement.
