Asian equities fell on Friday as investors locked in gains from this year’s technology rally and shifted into more defensive positions ahead of the weekend, with Middle East tensions and stalled US-Iran talks adding to the cautious tone.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.6% in early trading.
The selloff was sharpest in South Korea, where the Kospi slid more than 6% as investors reassessed the artificial intelligence trade after Broadcom’s latest outlook failed to meet elevated expectations.
Japan’s Nikkei dropped 1.3%.
The decline marked a pause in a rally that had lifted several Asian technology markets this year, particularly those exposed to semiconductors, memory chips and AI infrastructure.
AI trade loses momentum
“It seems like quite a risk-off today,” Charu Chanana, chief investment strategist at Saxo, told Reuters.
She said South Korea had been “one of the biggest beneficiaries of the AI memory supercycle”, making the market vulnerable when investors began to question whether expectations around AI demand had run too far.
The pressure followed Broadcom’s results, which showed strong underlying demand but left investors disappointed by the company’s AI semiconductor outlook.
That was enough to trigger broader de-risking across the semiconductor chain, particularly in markets that had already priced in a powerful earnings cycle from AI-related spending.
US equity futures also weakened. Nasdaq futures fell 1%, while S&P 500 futures slipped 0.5% after a mixed Wall Street session.
In Europe, EUROSTOXX 50 futures were down 0.2%, DAX futures lost 0.5%, and FTSE futures were little changed.
Oil holds near weekly gains
Energy markets were steadier, though oil remained on course for weekly gains as traders waited for clarity on US-Iran negotiations and the outlook for shipping through the Strait of Hormuz.
Brent crude futures were little changed near $95 a barrel and set for a weekly gain of more than 3%.
US crude slipped 0.3% to $92.73 a barrel, though it was still on track to rise more than 6% for the week.
Kristian Kerr, head of macro strategy at LPL Financial, said investors may be underestimating how difficult it could be to restore shipping through the Strait of Hormuz to pre-war levels, even if Washington and Tehran reach a memorandum of understanding.
Any initial improvement in supply is likely to come from crude that has already been produced, including stranded or floating cargoes and storage, Kerr said.
That would amount to clearing existing bottlenecks rather than a sustained restart in production or exports.
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