(Sharecast News) - Asia-Pacific equities fell on Friday, tracking overnight losses on Wall Street as a renewed sell-off in artificial intelligence stocks weighed on sentiment across the region.
Disappointing trade data from China added to the cautious tone, underscoring concerns over global demand and uneven economic recovery.
Patrick Munnelly, market strategy partner at TickMill, said Asian markets saw a downturn "wrapping up a turbulent week marked by clashing sentiments - excitement over technological advancements clashing with rising scepticism about whether the sky-high valuations in the artificial intelligence (AI) sector can truly hold up."
He noted that "the MSCI Asia Pacific Index dropped 1.1%, putting it on course for its worst weekly performance since early August," as Japanese tech stocks, particularly chipmakers, bore the brunt of the losses following a rough session on Wall Street where AI heavyweights like Nvidia stumbled.
Tokyo benchmark led lower by tech plays as household spending rises
In Japan, the Nikkei 225 dropped 1.19% to 50,276.37 and the broader Topix fell 0.44% to 3,298.85, led lower by declines in AI-linked and semiconductor shares.
SoftBank fell 6.87%, Advantest lost 5.54%, Renesas Electronics declined 3.75%, and Tokyo Electron eased 1.35%.
Kanadevia Corporation plunged 19.18%, Ajinomoto dropped 16.19%, and Taiyo Yuden slid 16.11%.
Economic data showed household spending rose 1.8% in September from a year earlier, marking a fifth consecutive monthly gain but undershooting economists' forecasts for a 2.5% rise.
Analysts said weak real wage growth and a soft yen continued to constrain purchasing power, despite government support measures introduced by prime minister Sanae Takaichi to offset high living costs.
Munnelly added that investors who had fuelled this year's rally on hopes of Federal Reserve rate cuts and AI-driven growth "are now reassessing whether massive investments in computing infrastructure will deliver the expected returns."
Chinese equities fall as October trade data misses
Chinese shares also weakened after October trade data missed expectations.
The Shanghai Composite slipped 0.25% to 3,997.56 and the Shenzhen Component fell 0.36% to 13,404.06.
Asia Cuanon Technology Shanghai tumbled 10%, Shanghai Highly Group lost 7.13%, and Ningbo Tuopu Group shed 5.47%.
Exports in US dollar terms declined 1.1% year-on-year, their first drop since March 2024, while imports rose just 1%, well below expectations for 3.2% growth.
Economists attributed the contraction to fading front-loading ahead of recent trade talks between Washington and Beijing.
Munnelly observed that "in China, exports took an unexpected hit in October, reflecting renewed trade tensions with the US," adding that these challenges "come at a time when the Chinese economy is showing signs of slowing down as the year approaches its end."
Other markets also close red, with Wellington the exception
Elsewhere in the region, Hong Kong's Hang Seng Index fell 0.92% to 26,241.83, with technology and consumer names under pressure.
Kuaishou Technology slid 5.93%, Pop Mart International lost 5.88%, and New Oriental Education declined 4.95%.
In South Korea, the Kospi dropped 1.81% to 3,953.76, with Samsung Electronics down 1.31% and SK Hynix off 2.19%.
The Kosdaq lost 2.38% to 876.81 as LIG Nex1 slumped 16.53% and Douzone Bizon fell 11.35%.
Australia's S&P/ASX 200 shed 0.66% to 8,769.70, weighed by losses in technology and travel stocks.
Block Inc plunged 15.76%, Zip Co fell 6.65%, and Qantas Airways dropped 6.58%.
In contrast, New Zealand's S&P/NZX 50 rose 0.16% to 13,599.21, lifted by gains in Scales Corporation, up 3.22%, and Skellerup Holdings, which advanced 2.62%.
Dollar gains on regional currencies as oil prices rise
In currency markets, the dollar edged higher, trading at JPY 153.17 against the yen, AUD 1.5438 on the Australian dollar, and NZD 1.7809 against the Kiwi.
Oil prices strengthened, with Brent crude futures last up 0.95% on ICE at $63.98 per barrel, and the NYMEX quote for West Texas Intermediate gaining 1.06% to $60.06.
Reporting by Josh White for Sharecast.com.
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