(Sharecast News) - Asia-Pacific markets fell sharply on Friday as a renewed rout in US semiconductor shares spread across the region, intensifying concerns over artificial intelligence spending.
The declines followed another weak Wall Street session, where the Nasdaq Composite dropped 1.47%.
South Korean markets were closed for the Constitution Day holiday.
"The market is ending the week with two bruises: AI fatigue and Hormuz heat," said Patrick Munnelly, market strategy partner at TickMill.
"The semiconductor selloff has gone from profit-taking to position-clearing, dragging Asia toward its worst levels in months, while Brent's rebound toward $85 per barrel keeps the inflation-risk premium alive.
"Soft US CPI and PPI were enough to cool Fed hike pricing but not enough to calm the broader tape.
"The message from markets is blunt: rate expectations have softened, but risk appetite has not been rescued."
Stocks in the red across the region
Japan's Nikkei 225 plunged 4.03% to 64,141.12, while the Topix fell 2.71% to 3,919.21.
Kioxia Holdings sank 16.1% after a federal jury in Texas ordered the memory chipmaker to pay $229m in damages for infringing a Viasat patent related to computer memory technology.
Sumco Corporation lost 15.17% and Screen Holdings declined 12.04%.
"This is no longer just Korea's problem," Munnelly added.
"Earlier in the week, the Kospi was the lightning rod, reversing violently as SK Hynix and Samsung were hit by AI valuation doubts.
"Today's weakness has broadened into Japan and Taiwan, which matters because the AI trade is not a single-stock story.
"It is a global supply-chain trade.
"When investors start marking down the whole stack - memory, foundry, equipment and storage - the signal is more serious."
Mainland Chinese stocks also suffered heavy losses, with the Shanghai Composite down 3.05% at 3,764.15 and the Shenzhen Component tumbling 5.4% to 13,706.88.
Espressif Systems Shanghai fell 13.87%, Guangzhou Fangbang Electronics dropped 13.85%, and Beijing Worldia Diamond Tools lost 13.51%.
Hong Kong's Hang Seng Index declined 1.78% to 24,562.24.
Semiconductor manufacturer SMIC slid 9.97%, Kuaishou Technology fell 7.76%, and Laopu Gold was 6.27% weaker.
Australia's S&P/ASX 200 fell 0.5% to 8,796.70, led lower by Mesoblast, which dropped 11.91%.
Megaport declined 8.48% and Regis Resources lost 8.44%.
New Zealand bucked the regional trend, with the S&P/NZX 50 rising 0.59% to 13,694.68.
Skycity Entertainment Group gained 5.61%, Property for Industry advanced 2.58%, and Investore Property added 2.35%.
Dollar makes gains as oil prices rise
In currency markets, the dollar was last up 0.02% on the yen to trade at JPY 162.43, as it gained 0.3% against the Aussie to AUD 1.4337, and advanced 0.17% on the Kiwi to change hands at NZD 1.7145.
On Japan's currency, Munnelly said: "Japan is trying to manage two problems at once: a weak Yen and a fragile bond market.
"The yen hovered around 162.45 per dollar, near its weakest levels in four decades, even as finance minister Katayama reiterated that the government is watching markets closely and wants to avoid misunderstanding around fiscal and monetary policy.
"She also repeated that specific monetary policy decisions remain for the BoJ."
In commodities, Brent crude futures were last up 1.59% on ICE at $85.57 per barrel, while the NYMEX quote for West Texas Intermediate increased 1.86% to $80.42.
"Oil is not surging disorderly, but it is refusing to go away," Munnelly added.
"Brent rebounded from Thursday's losses to trade around $85 per barrel, leaving crude up roughly 12% on the week and on track for its largest weekly gain since April.
"The renewed pressure comes as US-Iran hostilities continue, the Strait of Hormuz blockade remains a live risk, and shipping traffic through the route continues to thin."
Reporting by Josh White for Sharecast.com.
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