AI Selloff Deepens in Asia; Oil Stays Elevated

By Sherry Qin

A punishing technology selloff deepened in Asia as investors continued to rotate out of the crowded artificial-intelligence trade.

The selloff has widened beyond highly leveraged AI companies with questionable funding economics, said Chris Weston, Pepperstone's head of research. "Investors are reducing exposure across the entire ecosystem, including businesses with stronger balance sheets and more established earnings."

South Korea's Kospi declined 2.55% and Japan's Nikkei Stock Average was 2.0% lower. Hong Kong's Hang Seng Index rose 0.4%, rebounding after suffering its worst day in seven months on Thursday. China's Shanghai Composite Index dropped 0.9%.

Semiconductor stocks led losses after the Philadelphia Semiconductor Index plunged 6.7% overnight. Samsung Electronics fell 2.8% and Kioxia Holdings was 4.6% lower.

Market turmoil has stalled a rush of multibillion-dollar fundraisings by AI-related companies, with SK Hynix becoming the latest casualty. The Korean memory giant dropped plans for a U.S. listing of unit Solidigm.

Asian currencies largely strengthened early Friday after U.S. Treasury yields fell overnight. The Japanese yen was a key beneficiary of the Treasury rally, with the greenback last down 0.3% at 156.20 yen. The 160 resistance level for the currency pair will likely remain intact in the near term, MUFG's Lloyd Chan said in a note.

However, energy-sensitive currencies such as Indonesian rupiah remained under pressure after the recent jump in oil prices. The dollar rose 0.25% to 18,045 rupiah.

Meanwhile, oil regained momentum amid multiple Houthis attacks on Saudi Arabia's energy infrastructure.

Iran has threatened wider strikes not only on American bases and warships but on airports, pipelines and other civilian targets in the neighboring countries of the Persian Gulf, if the U.S. and Israel restart their air campaign.

"Continued targeting of Saudi infrastructure leaves the market exposed to further volatility, as any successful strike on major production facilities, pipelines or export terminals could materially tighten physical supply," said Thadeu Dos Santos, regional director at Infinox, in a note.

Front-month WTI crude oil futures rose 0.4% to $99.86 a barrel, while front-month Brent crude oil futures gained 0.5% to $113.71 a barrel.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

October 22, 2026 22:21 ET (02:21 GMT)