Nikkei Falls 6% Into Bear Market as AI Selloff Spreads Across Asia and Europe
Japan's Nikkei 225 fell 6% on Friday to close more than 20% below its June peak, while South Korea's Kospi dropped 6% and European shares slid, as the AI-led rout that hit Wall Street spread across the globe.
TOKYO: Japan’s Nikkei 225 fell 6% on Friday, closing below 60,000 for the first time since May and more than 20% below its June peak, a drop that puts the index in bear market territory. The slide carried the selloff in artificial intelligence stocks from Wall Street across Asia and into Europe.
The Nikkei closed down 5.96% at 57,434.77, according to Kyodo News, while the broader Topix index fell 5.90% to 3,707.99. South Korea’s Kospi fell 6.02% to 5,059.69 after dropping more than 8% in early trading, a fall that set off a circuit breaker and halted trading for a time. Hong Kong’s Hang Seng fell 1.27% to 24,481.86, the Shanghai Composite slipped 1.10% to 3,649.18, and Australia’s S&P/ASX 200 lost 0.49% to 9,020.80.
In Europe, France’s CAC 40 shed 1.2% in early trading, Germany’s DAX lost 1.4%, and Britain’s FTSE 100 fell 1.5%, according to the Associated Press. U.S. shares were set to trade mixed, with Dow futures down 0.9% and S&P 500 futures up 0.1%.
Chip stocks lead the losses
Technology shares were among the biggest losers in Tokyo, including SoftBank Group and Advantest. Advantest, Tokyo Electron, Kioxia and SoftBank fell between 5% and 11%, according to dpa-AFX. In Seoul, Samsung Electronics, SK Hynix and SK Square fell 6% to 10%. Toyota Motor shares also fell sharply after the automaker reported weak profits the day before.
Thursday was Wall Street’s worst day since President Donald Trump shook markets worldwide in April 2025 with his “Liberation Day” tariffs. The S&P 500 fell 4.4%, the Dow Jones Industrial Average sank 1,833 points, or 3.4%, and the Nasdaq Composite tumbled 5.5%, its largest one-day drop in 19 months. The Nasdaq now sits 11.9% below its all-time high set last month. Nvidia, the chip company at the center of the AI boom, fell 9.3% and was the heaviest weight on the S&P 500.
What drove the selling
Investors have grown doubtful about AI stock prices, which critics say rose too high, and about the heavy borrowing and spending behind the race to build computing capacity for AI. The Democrats’ win in the U.S. midterm elections on Tuesday also raised the prospect of tighter regulation, including at the state level, where resistance to data center construction remains strong. Texas governor-elect Gina Hinojosa has called for a longer moratorium on data center approvals in her state.
“Of course, the selloff in companies that have so long whetted investors’ appetite could create buying opportunities at a discount,” Ipek Ozkardeskaya, a senior analyst at Swissquote, said.
South Korea’s government held an emergency meeting of senior officials after the Kospi’s drop. Finance Minister Lee Hyoung-il said the country’s economic fundamentals were solid and that officials were ready to unveil more steps to ease the turmoil in the market.
In energy trading on Friday, benchmark U.S. crude rose 0.2% to $90.69 a barrel, while Brent crude, the international standard, fell 0.1% to $98.28. The U.S. dollar rose to 158.26 Japanese yen from 157.68 yen.
Reporting based on coverage by the Associated Press, Kyodo News and dpa-AFX.
