Asian tech shares fell as investors grew nervous about the AI trade, MyBroadband reported, citing Bloomberg.
South Korea’s Kospi Index dropped 4.2%. The index is closely watched as a sign of how AI investments are doing. Chip maker SK Hynix was heading for its lowest close since April.
“US markets rebounded, but for the overall market environment to fully clear up, we still need to see what happens in the upcoming earnings,” said Kazuyuki Muramatsu, investment head at Nagomi Capital.
MSCI’s Asia Pacific Index fell 1.2%. This went against the tech gains seen on Wall Street on Monday. Futures for the Nasdaq fell 0.2%, and European shares were set to open 0.6% lower.
Data centre company Elice also had a hard start. Its shares plunged as much as 33% on its first day of trading in Seoul.
Muramatsu said the slump at Elice “also hurts sentiment, signalling the environment surrounding neocloud companies has yet to fully improve.”
The US dollar weakened. US government bonds, known as Treasuries, held on to their losses from Monday. Lower demand for safe assets pushed yields higher.
The yield on the 10-year US note stood at 5.13%. It climbed seven basis points during US trading. French bonds also fell after violent unrest in France over the weekend.
“The relief rally seen in US tech stocks overnight is failing to carry through to Asia,” said Frederic Neumann, chief Asia economist at HSBC Holdings.
Neumann said investors were still avoiding risk. He said rising bond yields and high energy prices were worrying them.
“Questions also continue to linger over the durability of the AI asset boom, with higher funding costs risking project delays or even cancellations,” Neumann said.
High bond yields are making it more expensive to borrow money, according to the report. Oil prices are also adding to fears about inflation.
In other business news, Elon Musk promised to give one of his SpaceX shares to every child in the United States. Bloomberg reported that the pledge is worth billions of dollars.
Musk, the world’s richest man, did not say how he would make the donation. He said only that the shares would be handed out through the Trump Accounts plan.
Media company NBC Universal, which made The Office and Friends, was also hit by a data breach. Its name was listed on a well-known hacker forum, Cybernews reported.
Researchers looked at samples of the data. They found what looked like internal project summaries, budget breakdowns and tax credit applications for upcoming shows. Pilot episodes are also said to be part of the stolen data.
In Japan, East Japan Railway Co, Daiwa Securities Group and SoftBank Corp were among firms hit by a wave of cyberattacks. Researchers believe these attacks are linked to breaches at South Korean banks last month, Bloomberg reported.
Meta Platforms and Tesla are among the big tech companies set to release their next earnings reports. Investors will use these results to judge whether the AI rally can keep going.
Source: this article is based on reporting by MyBroadband. Image: MyBroadband. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.