Aerial view of vehicles being driven on the road through the central business district in Beijing, China.
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Japan’s Nikkei 225 plunged below the 50,000 mark on Wednesday amid a wider decline in Asia markets as investors fled AI-related stocks.
The Nikkei lost 4.65%, while the Topix was down more than 3%. Shares in Japan’s SoftBank Group plunged more than 14% Wednesday amid a broader drop in Asian AI-linked companies, tracking declines in U.S. peers.
South Korea’s Kospi fell over 2%, with chip heavyweights Samsung Electronics and SK Hynix posting losses of over 7% and 8% respectively. The small-cap Kosdaq shed 5.39%.
The South Korean won weakened as much as 0.6% to 1,449.50 against the greenback, the lowest since April, data from LSEG showed.
Hong Kong’s Hang Seng index fell 1.36%, mainland China’s CSI 300 was down 0.9%.
Losses in Australia’s S&P/ASX 200 were relatively smaller at 0.77%.
Overnight in the U.S., the S&P 500 declined 1.17% to close at 6,771.55, while the Nasdaq Composite traded down 2.04% to finish at 23,348.64. The Dow Jones Industrial Average lost 251.44 points, or 0.53%, to 47,085.24.
Palantir shares shed about 8%, even after the software company beat Wall Street’s estimates for the third quarter and gave strong guidance, fueled by growth in its AI business.
AI stock gains have driven the S&P 500′s forward price-earnings ratio to above 23, near its highest level since 2000, per FactSet.
As those stocks have lifted the broader market to new highs in recent months, Anthony Saglimbene of Ameriprise said in an interview with CNBC that without a pullback, valuations were beginning to get “really stretched.”
— CNBC’s Sean Conlon and Fred Imbert contributed to this report.