Volkswacht Bodensee - Tokyo, Taipei lead losses as Asian markets suffer fresh tech rout

The artificial intelligence boom has sent technology valuations soaring to record levels as traders looked to get a slice of the next big thing while firms invested enormous amounts of money.

But questions have been raised in recent months about whether valuations have gone too far, and when companies will actually see any returns.

Worries about the AI trade have hammered the value of chip firms, with the Philadelphia Semiconductor Index losing about 19 percent from a June peak, according to Bloomberg.

Asian markets have been hammered, with Seoul's Kospi bearing the brunt of the selling, having more than doubled in the first six months of the year before losing about a third of its value since hitting a record in June.

But with South Korea enjoying a holiday on Friday, Tokyo and Taipei -- also heavily weighted toward tech -- were at the forefront of the selling.

Japan's Nikkei ended the day down four percent with Advantest, Tokyo Electron and tech investment titan SoftBank all sliding more than seven percent.

Chipmaker Kioxia collapsed 16 percent, meaning it has lost around half its value since briefly becoming the country's biggest firm by market capitalisation last month.

Taiwan's Taiex had shed 6.5 percent by the close as chipmaker TSMC retreated 7.3 percent -- a day after announcing record second-quarter profit and that it would invest a further $100 billion in the US state of Arizona.

There were also steep losses in Hong Kong, Shanghai, Singapore and Sydney, though Bangkok, Manila and Mumbai rose. London edged up slightly at the open while Paris dipped.

"The rally in AI-related stocks appears to be losing some momentum after months of almost uninterrupted gains," said Fawad Razaqzada, a market analyst at Forex.com.

Some investors "are increasingly questioning whether the enormous sums being committed to AI infrastructure can generate sufficient returns within a reasonable timeframe".

However, the selling "could simply reflect a period of portfolio rotation", he added. "Given the pace of the prior advance, some consolidation was always likely."

The dour mood in Asia followed losses in New York, where sharp falls in Nvidia and Amazon helped drag the Nasdaq down more than one percent.

Netflix plunged more than nine percent in after-hours trade as it warned of a second quarter of slowing sales growth.

Oil prices rose as the US and Iran continued to exchange strikes in a flare-up that has seen traffic through the key Strait of Hormuz fall back to a trickle.

The renewed hostilities have fanned fears of a return to war that could send crude prices back higher, putting fresh pressure on inflation and eventually forcing central banks to hike interest rates.

- Key figures around 0700 GMT -

Tokyo - Nikkei 225: DOWN 4.0 percent at 64,141.12 (close)

Hong Kong - Hang Seng Index: DOWN 2.1 percent at 24,479.33

Shanghai - Composite: DOWN 3.0 percent at 3,764.15 (close)

London - FTSE 100: UP 0.2 percent at 10,588.71

West Texas Intermediate: UP 0.5 percent at $79.46 a barrel

Brent North Sea Crude: UP 0.2 percent at $84.42 a barrel

Euro/dollar: UP at $1.1448 from $1.1436 on Thursday

Pound/dollar: UP at $1.3472 from $1.3468

Dollar/yen: DOWN at 162.23 yen from 162.42 yen

Euro/pound: UP at 84.98 pence from 84.91 pence

New York - Dow: DOWN 0.2 percent at 52,552.97 (close)

J.Sauter--VB