(Sharecast News) - Asia-Pacific markets fell broadly on Thursday, tracking continued declines on Wall Street as investors extended a rotation out of technology and artificial intelligence-linked stocks.
Sentiment was further shaped by caution ahead of key macro events, including US inflation data and an expected policy shift from the Bank of Japan.
The pullback followed what Russ Mould, investment director at AJ Bell, described as "selling in Asian and US markets overnight as fears about a possible AI bubble persist heading into the end of the year."
Losses in the US overnight weighed heavily on regional risk appetite after the Financial Times reported that Blue Owl Capital had withdrawn funding for one of Oracle's data centre projects, sending Oracle shares down 5.4%.
Other AI-related stocks, including Broadcom, Nvidia and Advanced Micro Devices, also retreated.
Investors were now focused on the US consumer price index for November, due later Thursday, the first inflation report released since last month's government shutdown.
"Delayed US inflation data is also likely to be scrutinised later as investors look for some clues about what direction the Federal Reserve might take next year," Mould said.
Economists surveyed by Dow Jones expected headline inflation to rise 3.1% year on year.
Tokyo benchmark slides, China mixed
In Japan, the Nikkei 225 slid 1.03% to 49,001.50, dragged lower by weakness in AI-related and industrial stocks ahead of the Bank of Japan's two-day policy meeting, which begins Thursday.
The central bank is widely expected to raise interest rates to 0.75% on Friday, the highest level in 30 years.
Japan Steel Works dropped 6.79%, Kawasaki Heavy Industries fell 4.5%, and Asahi Group Holdings declined 5.72%.
Asahi was in focus after Diageo agreed to sell its 65% stake in East African Breweries and its majority holding in Kenya-based spirits producer UDVK to the Japanese brewer in a $2.3bn deal, as Diageo continued to streamline operations following a difficult two-year period.
The broader Topix index eased 0.37% to 3,356.89.
Chinese markets were mixed, with the Shanghai Composite rising 0.16% to 3,876.37, supported by sharp gains in smaller names including Xi'an Bright Laser Tech, up 13.67%, Shanghai Yimin Commerce Group, which climbed 10.11%, and Shanghai Join Buy Co, up 10.04%.
In contrast, the Shenzhen Component fell 1.29% to 13,053.98.
In Hong Kong, the Hang Seng Index edged up 0.12% to 25,498.13, led by strength in CSPC Pharmaceutical Group, which gained 6.52%, China Petroleum & Chemical Corp, up 3.37%, and China Merchants Bank, which added 2.43%.
South Korean equities underperformed, with the Kospi sliding 1.53% to 3,994.51.
LG Energy Solution plunged 8.9% after Ford Motor cancelled a KRW 9.6trn battery supply agreement, following the US automaker's decision to scale back its electric vehicle ambitions.
The cancelled order represented more than a third of LG Energy Solution's total revenue last year.
LG Chemical also fell 8.52%, while LF Co declined by the same margin.
Sydney stocks flat, New Zealand in the red despite GDP growth
Australian stocks were broadly flat, with the S&P/ASX 200 inching up 0.04% to 8,588.20.
Shipbuilder Austal surged 5.05% after securing a contract under the Strategic Shipbuilding Agreement to design and build 18 landing craft medium vessels for the Australian Army, with construction set to begin in 2026 and final delivery expected in 2032.
Premier Investments rose 2.78% and Xero gained 2.52%, while Woodside Energy fell 2.65% after announcing that chief executive Meg O'Neill had resigned to take up the role of CEO at BP.
Commenting on the move, Mould said that "the timing and suddenness" of BP's leadership change had raised eyebrows, noting that O'Neill's appointment "should help give her some breathing space as she looks to implement her strategy when she starts in the role next April."
In New Zealand, the S&P/NZX 50 fell 0.29% to 13,256.77, despite data showing a sharp improvement in economic activity.
Annual GDP growth rebounded to 1.3% from a prior contraction of 1.1%, marking a 2.4 percentage point swing and matching analyst expectations.
Eroad dropped 3.48%, Synlait Milk fell 3.13%, and A2 Milk Company declined 2.21%.
Dollar mixed as oil prices rise
In currency markets, the dollar strengthened modestly against the yen, last trading up 0.13% at JPY 155.90, while it slipped 0.04% on the Aussie to AUD 1.5135 and rose 0.21% against the Kiwi to change hands at NZD 1.7354.
Oil prices edged higher, with Brent crude futures last up 0.44% on ICE at $59.94 per barrel, and the NYMEX quote for West Texas Intermediate rising 0.48% to $56.21.
Reporting by Josh White for Sharecast.com.
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