Asian Shares Fall as AI Rout Spreads, Kospi Sinks Below 5,400 and Brent Hits $114

Asian shares fell on Friday, Oct. 23, as the selloff in AI and chip stocks that hit Wall Street on Thursday rolled into a second day in Asia. Investors moved into sovereign bonds and safer currencies, and oil rose to a five-month high.

The MSCI index of Asia-Pacific shares outside Japan fell 0.3 percent on Friday, taking its loss for the week to 2.7 percent and marking a fourth straight week in the red, according to Reuters. Japan's Nikkei fell 1.3 percent and was down 5 percent for the week. The selling followed the biggest daily rally in U.S. Treasuries in more than three years, as traders cut bets on further Federal Reserve rate hikes. A December rate rise was no longer fully priced, with the implied probability down to 85 percent.

Seoul sinks below 5,400

South Korea took the heaviest hit. The Kospi opened down 130.6 points, or 2.36 percent, at 5,403.17, according to Yonhap. By 11:24 a.m. in Seoul the index was down 134.37 points, or 2.43 percent, at 5,339.40, after falling as low as 5,305.98 in morning trade. It was the first time since July 29 that the Kospi had traded below 5,400 during a session, according to Korea Exchange data reported by MoneyToday.

Chip shares led the fall. Samsung Electronics dropped more than 5 percent in morning trade, SoftBank Group and Kioxia each fell more than 7 percent in Tokyo, and SK Hynix lost about 2.5 percent. In mainland China, a blue chip index fell 1.1 percent to its lowest level since July 2025 and stood about 20 percent below its late June peak. Hong Kong's Hang Seng edged up 0.1 percent after falling 3 percent on Thursday. Taiwan's market was closed because of a typhoon.

The Wall Street trigger

The slide started in New York. On Thursday the Nasdaq Composite fell 2.6 percent and the S&P 500 fell 1.21 percent, while the Dow Jones Industrial Average rose 0.02 percent. The Philadelphia Semiconductor Index plunged 6.72 percent. Micron fell 6.26 percent, Intel fell 8.04 percent and Nvidia fell 4.4 percent, as investors questioned the enormous funding needs behind AI data centres after Meta's results.

"AI is under the cosh," said Charlie McElligott of Nomura Securities International in New York, in a note cited by Reuters. He said Treasury bonds were working as a hedge again as the market repriced the chances of a U.S. growth scare.

Oil at $114 and a Japan price signal

Oil moved the other way. Brent crude hit a five-month peak of $114 a barrel on Friday after Houthi attacks in Saudi Arabia raised fears of wider disruption to energy supplies from the Middle East conflict.

Japan added a separate signal on Friday. Core consumer inflation rose 2.1 percent in September from a year earlier, above the Bank of Japan's 2 percent target for the first time in nine months, after a 1.7 percent rise in August. A narrower index that strips out fresh food and fuel rose 2.4 percent. The Bank of Japan raised its key rate to 1.25 percent last month, a 31-year high. Reuters reported it is expected to hold policy next week but may raise its inflation forecast.