Asian stocks fall as AI investment concerns follow Wall Street sell-off

Asian stock markets fell on Friday, November 6, following a technology-led sell-off in the United States, as investors questioned the outlook for artificial intelligence investment. Japan, South Korea and Taiwan recorded declines, with Reuters linking the retreat to concerns about regulation, data-center construction and returns on AI infrastructure spending.¹²³

Losses across technology markets

Reuters reported that Japan’s Nikkei 225 dropped 7% at the opening and that South Korean and Taiwanese benchmarks lost more than 8% before stabilizing. In its morning report, the Associated Press put the Nikkei’s initial decline at more than 6% and South Korea’s Kospi loss at 7.4%.²³

The reports captured different stages of trading. abc17news.com reported that the Nikkei and Kospi each finished 6% lower, while Taiwan’s Taiex closed down 4.5%. Samsung Electronics shares fell 7.9% during morning trading, according to the Associated Press.¹³

The Asian declines followed a Thursday US market retreat that erased about $2.5 trillion in value and sent the Nasdaq down 5.5%, according to abc17news.com. The outlet reported that Asian technology businesses had benefited from demand for semiconductors used in large AI data centers.¹

Questions over spending and policy

Reuters cited investor and analyst concerns about tighter AI regulation, slower construction of data centers and reduced confidence in the profitability of infrastructure spending. The Associated Press separately reported concerns that costly borrowing, political opposition and possible construction pauses could weaken future demand for chips, electricity and associated services.²³

The political backdrop added to those concerns. According to abc17news.com, Democrats won control of both the House and Senate, and investors were concerned that Democratic representatives could delay or obstruct new AI infrastructure spending. Those concerns were about possible policy changes, rather than a reported decision to halt investment.¹

Jung In Yun, founder and chief executive of Fibonacci Asset Management Global, attributed Friday’s losses to a likely reassessment of expectations for AI investment and policy, according to abc17news.com. Theodore Shou, a partner at Yiyi Capital, offered a different emphasis, saying AI shares had attracted excessive enthusiasm earlier in the year and were now adjusting.¹

Governments monitor the decline

Japanese and South Korean officials acknowledged the volatility, abc17news.com reported. Japanese Prime Minister Sanae Takaichi said the government was closely following developments. “We will focus on steps to create a strong economy,” she said.¹

South Korean Finance and Economy Minister Lee Hyoung-il held a meeting on the economic implications of the US elections, according to the same outlet. It reported that South Korean officials would prepare measures intended to prevent market overreactions, while acknowledging that effects on global markets could not be excluded.¹