Asian stock markets slip further as AI shares face valuation pressure

Friday saw another round of losses across Asian stock markets following a pronounced tumble the previous day. Japan's one outlet and South Korea's KOSPI each edged lower, whereas Singapore's one outlet index remained flat and Hong Kong's Hang Seng managed a modest gain. The most pronounced drops occurred on the Chinese mainland and in Taiwan, where AI-focused firms led the sell-off as investors questioned their lofty valuations and the profitability of recent infrastructure spending.

Higher oil prices, linked to the Iran conflict, are adding inflationary pressure that may prompt central banks to raise rates, further tightening corporate financing. Even companies like Meta and semiconductor equipment maker Lam Research slipped despite reporting earnings that beat forecasts, highlighting a market that is less forgiving of optimistic outlooks. Analyst Fawad Razaqzada of Forex.com noted that strong earnings are no longer enough to sustain one outlet hype around AI stocks.