Daijiworld Media Network - Hong Kong
Hong Kong, Feb 13: Asian equities retreated from record levels on Friday as renewed concerns over the broader impact of artificial intelligence weighed heavily on US technology stocks, triggering a flight to the safety of US Treasuries.
The MSCI Asia Pacific Index fell for the first time in six sessions, led by losses in Japan, while South Korean stocks edged slightly higher. The weakness followed a sharp sell-off on Wall Street, where the S&P 500 dropped 1.6% and the Nasdaq 100 declined 2% on Thursday, dragged down by mega-cap technology stocks.
The downturn extended beyond tech to sectors such as logistics and commercial real estate, reflecting investor unease over how artificial intelligence could disrupt multiple industries.
However, early Asian trading showed tentative signs of stabilisation, with US equity-index futures edging higher. Gold steadied after tumbling 3% in the previous session, with algorithmic trading seen amplifying the fall. Bitcoin rose modestly after four straight days of losses.
The cross-asset weakness prompted investors to seek refuge in US government bonds. Treasuries rallied across the curve on Thursday, pushing the two-year yield down five basis points and the 10-year yield seven basis points lower to 4.1%.
The volatility in US markets underscored the heightened stakes surrounding the AI boom and its ripple effects across sectors and asset classes. The rapid shift in sentiment sent precious metals lower while funds flowed into safer assets.
“Software stocks are now trading like banks in 2008,” said Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore, drawing a parallel with the global financial crisis. He cautioned that although Asia has performed well so far this year, correlation with global markets and the risk of a tactical unwind remain concerns.
Investors are now focused on US January inflation data due later Friday. The median forecast points to a 2.5% year-on-year rise in the core consumer price index, excluding food and energy. Traders continue to see little chance of a rate cut by the Federal Reserve at its March meeting, with a July reduction fully priced in.
Benjamin Wiltshire of Citigroup Inc. said markets may be complacent about inflation risks. He noted that investors could be underestimating the resilience of the US consumer and that inflation expectations may need upward revision.
In commodities, oil prices slipped as risk-averse sentiment dominated global markets and fresh US-Iran tensions clouded the supply outlook.
Despite the broader sell-off, there were pockets of optimism. Applied Materials Inc. surged 10% in late trading after issuing a stronger-than-expected sales forecast, signalling robust demand driven by AI and memory semiconductor investments.
Meanwhile, Anthropic completed a $30 billion funding round at a $380 billion valuation. Separately, OpenAI is rolling out its first AI model compatible with chips from Cerebras Systems Inc., broadening its supplier base beyond Nvidia Corp.. OpenAI has also alerted US lawmakers that Chinese rival DeepSeek is allegedly using sophisticated methods to extract outputs from leading US AI models.
On the trade front, the US and Taiwan finalised an agreement to lower tariffs, expand market access for American products in Asia, and channel billions of dollars into US energy and technology projects.
Among other corporate developments, Clear Street Group Inc. postponed its US initial public offering after sharply cutting its valuation target. Westpac Banking Corp. reported a rise in first-quarter profit, driven by gains in home loans and strong institutional lending. CK Hutchison Holdings Ltd. warned A.P. Moller-Maersk A/S of legal action if its terminal unit attempts to take over operations at two ports near the Panama Canal.
Market snapshot:
Stocks:
S&P 500 futures rose 0.2% as of 9.01 am Tokyo time. Hang Seng futures fell 1%. Japan’s Topix slipped 0.4%, while Australia’s S&P/ASX 200 declined 1%. Euro Stoxx 50 futures were down 0.6%.
Currencies:
The Bloomberg Dollar Spot Index was little changed. The euro traded at $1.1869, the yen at 152.83 per dollar, offshore yuan at 6.8981 per dollar, and the Australian dollar at $0.7089.
Cryptocurrencies:
Bitcoin rose 0.6% to $66,205.32, while Ether gained 1.2% to $1,945.98.
Bonds:
The 10-year US Treasury yield held at 4.10%. Australia’s 10-year yield fell eight basis points to 4.72%.
Commodities:
West Texas Intermediate crude and spot gold were little changed.