Most Asian stocks slipped on Thursday as technology shares declined sharply. The drop came after Oracle reported weaker-than-expected earnings, raising fresh concerns about the sustainability of the broader artificial intelligence rally.
Losses in tech and renewed doubts over AI overshadowed the Federal Reserve’s dovish tone. The Fed cut interest rates as expected and also signaled plans to expand asset purchases, a move usually viewed as supportive for markets.
Despite a positive close on Wall Street the previous day, U.S. futures weakened during Asian trading. S&P 500 futures fell 0.8% at 23:41 ET (04:41 GMT), while Nasdaq 100 futures slid 1.1%.
Japan was hit hardest, with heavy selling in AI-related and tech shares.
Asia stocks see limited support from dovish Fed outlook
Some non-tech sectors in Asia were more resilient. Singapore’s Straits Times Index rose 0.3%, while South Korea’s KOSPI was flat as gains in industrials offset tech losses.
China’s markets remained subdued. The Shanghai Shenzhen CSI 300 dipped 0.2%, the Shanghai Composite dropped 0.5%, and Hong Kong’s Hang Seng Index was little changed.
Australia’s ASX 200 rose 0.2% after softer labor market data increased expectations that the Reserve Bank of Australia may soon need to cut rates.
India’s Nifty 50 index also gained 0.2%, supported by its relatively smaller tech weighting.
Asian markets drew some support from Wall Street’s reaction to the Fed. While Chair Jerome Powell highlighted a higher threshold for future cuts, he also announced that the central bank will begin buying about $40 billion in Treasury notes starting next month. The move signals looser monetary conditions ahead and improved liquidity.
Earlier in the week, anticipation of the Fed meeting kept Asian markets cautious.
Japan lags on tech losses and China tensions
Japanese stocks underperformed regional peers. The Nikkei 225 fell 0.8%, while the TOPIX declined 0.7%.
Sentiment was dragged down by steep losses in AI-focused tech and industrial names. Oracle’s disappointing earnings and capex outlook fueled fears of excessive spending in the AI sector. Oracle slid more than 10% in U.S. aftermarket trading, Nvidia lost over 1%, and broader U.S. tech stocks also fell.
SoftBank Group (TYO:9984), heavily exposed to both Oracle and the AI sector through its OpenAI stake, dropped over 8%, making it the biggest loser on the Nikkei.
Japan also remained under pressure from diplomatic tensions with China following comments from Japanese Prime Minister Sanae Takaichi regarding Taiwan.
However, losses in tech were partially offset by optimism after Nvidia was granted approval to sell more advanced AI chips in China. Japanese supplier Advantest (TYO:6857) jumped as much as 4%.
Chinese chip stocks extended their decline for a third straight session. The prospect of Nvidia reentering the Chinese market raised competitive pressures. SMIC (HK:0981) and Hua Hong Semiconductor (HK:1347) each fell about 2.5%.
In Taiwan, TSMC (TW:2330), the world’s largest contract chipmaker, dropped 2.3% after reporting lower November sales compared with the prior month.
