Asian shares trading low after Wall Street losses on AI-related worries

Asia shares were trading mostly lower Friday, tracking sharp Wall Street losses on a sell-off of technology-related stocks that investors fear could lose out from artificial intelligence disruptions. US futures were mostly unchanged.

Tokyo's Nikkei 225 fell 0.8 per cent to 57,165.13 on Friday, after it passed the 58,000 mark for the first time early Thursday. SoftBank Group, which has a focus on AI, fell 6.8 per cent even as the company reported a quarterly profit Thursday building on its investments in OpenAI, among other gains.

South Korea's Kospi rose 0.4 per cent to 5,545.49, after crossing 5,500 on Thursday, driven by gains in technology-related stocks. Samsung Electronics, the Kospi's largest listed company, was up 1.2 per cent.

 

Hong Kong's Hang Seng fell 1.8 per cent to 26,547.97. The Shanghai Composite index was down 0.7 per cent to 4,105.04.

In Australia, the S&P/ASX 200 traded 1.4 per cent lower at 8,919.30.

On Thursday, Wall Street saw sharp losses as AI worries dampened sentiment. The S&P 500 fell for its second-worst day since Thanksgiving, dropping 1.6 per cent, or 108.71, to 6,832.76, but it's still near an all-time high that was set last month. The Dow Jones Industrial Average was down 1.3 per cent, or 669.42, to 49,451.98. The Nasdaq composite lost 2 per cent, or 469.32, to 22,597.15.

American technology giant Cisco Systems sank 12.3 per cent even though it reported better-than-expected quarterly results, as investors were concerned about its ongoing profitability.

Shares of technology company AppLovin plunged 19.7 per cent despite better-than-expected quarterly profits as worries over AI undercutting its business weighed on its stock price.

Fears of AI disruptions across industries in recent days have hit investor confidence in companies, especially in software stocks. Some analysts say uncertainties surrounding the AI disruption risk are likely to go on for a while. Many remained concerned about whether massive AI investments by companies will eventually pay off.

But other analysts are more optimistic. Economists at Capital Economics, for example, argue that they still believe in the AI rally, and that this year will be a "good year" for the S&P 500, building on the technology-led gains.

"Our sense remains that a sustained reversal of tech outperformance would require a big slide in tech itself," Thomas Mathews, head of markets for Asia Pacific at Capital Economics wrote in a recent note. "We think tech will fare very well."  For other US stocks, McDonald's was up 2.7 per cent following stronger-than-expected profits. Walmart gained 3.8 per cent.

Investors and economists are also paying close attention to the US inflation data set to be released Friday, which could impact on the Federal Reserve's interest rate moves. Some economists expect the likelihood of another rate cut is low for the next few months.

In other dealings early Friday, US benchmark crude oil lost 0.1 per cent to $62.77 a barrel. Brent crude, the international standard, fell less than 0.1 per cent to $67.49 per barrel.

Gold and silver prices gained on Friday. The price of gold - which earlier fell back below $5,000 per ounce - was up nearly 1 per cent to $4,995.80. The price of silver rose 1.4 per cent to $76.72 per ounce.

The US dollar rose to 152.89 Japanese yen from 152.72 yen. The euro was trading at $1.1867, down from $1.1871.