AI Selloff Continues in Asia; Oil Stays Elevated — Update

By Sherry Qin

Asian stocks lost ground amid a punishing selloff in the technology sector this week as investors continued to rotate out of the crowded artificial-intelligence trade, though markets pulled off their early lows.

Semiconductor stocks were mostly lower after the Philadelphia Semiconductor Index plunged 6.7% overnight. Samsung Electronics fell 0.6% and Kioxia Holdings was 0.3% lower.

SK Hynix bounced back to be 3.2% higher after losing as much as 4.25% in early trade. The Korean memory giant had been pressured by news it had dropped plans for a U.S. listing of its unit, Solidigm, citing increasing market volatility. SK Hynix joins a growing list of AI-related companies who have pulled their multibillion-dollar fundraising plans amid the market turmoil.

Though the selloff has narrowed slightly in afternoon trading, the losses have spread beyond highly leveraged AI companies with questionable funding economics. "Investors are reducing exposure across the entire ecosystem, including businesses with stronger balance sheets and more established earnings," said Chris Weston, Pepperstone's head of research.

South Korea's Kospi was 0.3% lower and Japan's Nikkei Stock Average was down 0.5%, paring some of their losses in early trading Friday. Hong Kong's Hang Seng Index was 0.75% higher, rebounding after suffering its worst day in seven months on Thursday. China's Shanghai Composite Index slipped 0.3%. Taiwan's market was closed on Friday due to a typhoon.

As the market is increasingly focused on how AI's financing needs compete with U.S. Treasurys for investors' capital, the recent dampening in AI confidence has boosted appetite for safe-haven assets such as U.S. Treasurys and the Japanese yen.

The 10-year Treasury yield has fallen below 5.000% and was last at 4.969%.

The yen strengthened to its highest level in a year against the euro as investors sought its relative safety of the Japanese currency amid concerns over French debt.

Meanwhile, oil regained momentum after 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 0.85% to $200.32 a barrel, while front-month Brent crude oil futures gained 0.7% to $113.94 a barrel.

Gold continued to trade lower, dipping below the $4,000 per ounce level briefly on Friday. Elevated inflation risks are fuelling expectations for the Federal Reserve to tighten the monetary policy, creating near-term headwinds, ANZ analysts said in a note. The spot gold was last 0.3% $4,013.92 an ounce.

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

(END) Dow Jones Newswires

October 23, 2026 01:53 ET (05:53 GMT)