Asian Stock Markets Plunge Amid Tech Selloff: Valuations Under Scrutiny
Asian stocks experienced a sharp decline due to tech-led selloffs on Wall Street, resulting in increased market volatility. Notable drops were seen in Japanese and South Korean markets. The slide in valuations raises concerns about potential corrections, reminiscent of the dot-com bubble, amidst enthusiasm for generative AI.
On Wednesday, Asian stock markets saw significant declines, driven by a tech-led selloff in Wall Street, leading to a sharp rise in market volatility not seen since April. Japan's stock index plummeted 4.5%, and South Korean shares fell by as much as 6.2% after reaching record highs a day earlier.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 2.3%, its steepest fall since U.S. President Donald Trump's tariff announcement in April. The selloff notably impacted Japanese conglomerate SoftBank Group, which saw a 10% tumble as Nasdaq Composite tracked a 2% drop overnight.
Analysts cite concerns that market valuations have become overheated, with figures such as Morgan Stanley and Goldman Sachs' CEOs questioning the sustainability of such levels. The enthusiasm for generative AI is drawing parallels with past bubbles, inciting fears of a correction.
Google News