Wednesday 10 June 2026 8:06 am
South Korea suffered a mass sell-off amid AI fears
Asian markets have plunged into the red during Wednesday trading, as the widespread tech sell-off reignited once more on Wall Street.Chipmakers and companies tied to the AI investment boom dragged US stocks down on Tuesday, as last week’s tech jitters came back to plague the market just days before SpaceX’s anticipated listing.The Nasdaq tumbled 2.2 per cent by early afternoon in New York, as volatile trading extended the tech-heavy index’s slump, before it managed to pare back its decline, closing at a 0.9 per cent loss.Many of the index’s valued tech stocks that have pushed it to record highs suffered significant falls, with Dell Technologies falling 4.7 per cent to $381.7, despite the stock adding 134.7 per cent to the Nasdaq in the past month.Intel also reported a 2.1 per cent loss at market close, after crashing more than nine per cent earlier during the trading session.The blue-chip S&P 500 also declined 0.2 per cent, as gains from its real estate groups, healthcare companies and material stocks prevented heavier losses.Asian markets tumble once moreInvestor fears seeped once more into the Asian markets, ending the recovery seen during Tuesday trading.South Korea’s Kospi suffered the largest losses, plunging 6.2 per cent to 7,609.4 marks, bringing the index further away from the coveted 8,000 point mark.Index heavyweight Samsung Electronics recorded a 5.5 per cent decline, trading at 304,250 KRW.But SK Hynix saw the most bruising losses, falling 8.5 per cent to 2,026,000 KRW, with deals secured with Nvidia earlier this week unable to soothe investor fears.In Japan, the tech-heavy Nikkei 225 fell 1.8 per cent to 64,186 points, with semiconductor company, Sumco Corporation, plunging 9.4 per cent.Taiwan’s TAIEX declined 3.3 per cent, with the index particularly vulnerable to the performance of US tech stocks due to its status as the ‘manufacturing engine’ for the US AI and consumer electronics surge.The AI spook also creeped into markets with little exposure to the AI wave, with India’s Nifty 50, which is dominated by financial services stocks, dipping 0.6 per cent.Elsewhere, China’s Shanghai Composite, whose biggest components are state-backed banks and energy companies slipped 0.4 per cent.Deutsche Bank compared the sell-offs to “markets… swinging between 1999-style AI exuberance and 2000-type tech crash fears”.What is causing the tech sell-off?The movement across Tuesday and Wednesday trading extended the rotation that began on Friday out of defence and tech stocks into utilities, consumer staples and real estate.Analysts have attributed the switch in stocks to investors opting to reposition their portfolio ahead of SpaceX’s initial public offering on Friday, amid fears of stretched valuations.The Nasdaq listing is expected to raise as much as $68bn, but some analysts have expressed concerns over its valuations, growth plans and governance – raising eyebrows among some investors.Meanwhile AI rivals, Open AI and Anthropic, have also confidentially submitted the paperwork for their own IPOs, with both firms expected to grab a valuation of roughly $1 trillion when they come to market.Susannah Streeter, chief investment strategist at Wealth Club, said: “The AI space is increasingly crowded with companies priced for perfection jostling for investors’ attention. “Elon Musk is aiming to rocket higher than the rest with his SpaceX listing garnering huge attention. It’s adding to the jitters which the market can’t shake off, and it’s likely that the SpaceX launch on Friday will ignite fresh volatility.”Nerves surrounding the size of tech giant’s AI spending have intensified off the back of Alphabet confirming its plans to raise up to $85bn in equity to fund its infrastructure investments.
