Asian Stocks Slide on Tech Rout as Bonds Rally: Markets Wrap

Asian Stocks Slide on Tech Rout as Bonds Rally: Markets Wrap

Broad Asia-Pacific Decline, MSCI Index Posts Fourth Weekly Loss

MSCI's broadest index of Asia-Pacific shares excluding Japan fell 0.3% on Friday, bringing its weekly loss to 2.7% and marking a fourth straight week in the red. Japan's Nikkei dropped 1.3% and was down 5% for the week. Australia's S&P/ASX 200 fell 0.4%, while Euro Stoxx 50 futures were little changed. The selling extended a US-led tech rout into Asian hours, according to swissinfo.

Korean Chips Lead Declines as KOSPI Breaks Below 5,400

South Korea's KOSPI opened 2.36% lower at 5,403.17 and extended losses to 5,353.48 by 9:40 a.m., down 3.26% from Thursday's close of 5,533.77. Aju Press reported that Meta's AI spending concerns deepened a semiconductor selloff. SK Hynix had earlier scrapped an IPO of its US subsidiary Solidigm after shareholder opposition, adding to chip-sector unease.

China Enters Bear Market as CSI 300 Falls 20% From June Peak

China's CSI 300 Index fell as much as 1.7% Thursday, bringing total losses from its June high to 20% and meeting the bear-market threshold; the index has now declined for 10 consecutive weeks and is down 2.6% this week. At Thursday's morning break the CSI 300 stood at 4,060.19, about 13.94% below its January 1 level. CNBC attributed the slide to a prolonged sell-off in mainland equities, while Bloomberg cited fading stimulus hopes, weak earnings and AI-trade unwinding. China held its one-year loan prime rate at 3.0% on Tuesday. Third-quarter GDP grew 4.5% and September retail sales rose 1.1%.

Hong Kong Tech Slumps as Alibaba Posts Steepest Drop in Two Months

Alibaba suffered its steepest drop in two months on Thursday, dragging the Hang Seng Tech Index down 5%, its biggest decline since April 2025. Business Times quoted Lombard Odier strategist Homin Lee saying investor sentiment remains very poor and that without new policy or tech catalysts, a volatile, directionless environment may persist into early 2027. Hang Seng futures rose 0.8% on Friday.

Bonds Rally as Havens Draw Cash

Asian government bonds rallied. The 10-year Japanese government bond yield fell 9 basis points to 2.790%, and Australia's 10-year yield dropped 10 bps to 5.164%. Perth Now noted funds moved into sovereign bonds and safe-haven currencies amid the tech rout. US Treasuries also surged across the curve, pushing the 10-year yield below 5% for the first time in a month, driven by the deepening AI-share rout, French market turmoil and renewed Middle East tensions.

Oil and Bitcoin: Middle East Tensions Lift Crude, Weigh on Crypto

Middle East tensions pushed oil higher. Brent crude rose 2.7% to $111.73 a barrel; US crude earlier reached $102. Coinspeaker reported Bitcoin fell from nearly $85,000 to about $82,200 early Thursday, October 22, after a report that US and Israeli militaries drew up plans to resume strikes on Iran. swissinfo showed Bitcoin up 0.2% to $81,365.49 on Friday and Ether up 0.4% to $2,390.47. The Bloomberg Dollar Spot Index was little changed; the euro traded at $1.1219, the yen at 156.77 per dollar and the offshore yuan at 6.6733.

AI Financing Costs and Earnings Season Take Center Stage

Political.org reported investors sharply pared bets on further Federal Reserve rate increases. The next catalysts are earnings season, any new Chinese stimulus and Middle East developments. CoreWeave's 15.5% plunge on October 14, when its own bond yields spiked to about 15% on AI financing fears, underscored that AI infrastructure financing costs have become a tighter constraint than chip shortages. Analysts broadly see AI spending sustainability and funding capacity as the key variables for tech shares.