Asian markets decline as tech stocks extend losses

Technology shares dragged most Asian markets lower on Thursday as investors continued pulling back from the sector amid growing concerns that the artificial intelligence-driven market rally is losing steam.

Heavy selling was most visible in South Korea, where the benchmark Kospi index slumped sharply after a strong run earlier this year. Major chipmakers Samsung Electronics and SK hynix suffered steep losses as investors reduced exposure to semiconductor stocks.

Japan‍‍`s technology sector also came under pressure, with memory chipmaker Kioxia posting one of the biggest declines during trading.

Market analysts said the sell-off reflects a broader reassessment of AI-related investments, with concerns mounting over stretched valuations, high borrowing costs and uncertainty over when massive spending on artificial intelligence will begin generating stronger returns.

Some analysts also linked the sharp decline in South Korean shares to margin calls affecting retail investors, while reports that Apple is exploring chip supply deals with Chinese manufacturers added further pressure on regional semiconductor stocks.

Despite weakness across technology counters, markets in Hong Kong, Singapore, Jakarta and Manila posted gains, while stocks in Shanghai, Sydney, Wellington and Taipei also finished lower.

Investor sentiment received some support from comments by US Federal Reserve Chair Kevin Warsh, who said inflation pressures have eased in recent weeks, reducing concerns that the central bank could move quickly to raise interest rates.

Warsh reaffirmed the Federal Reserve‍‍`s commitment to bringing inflation back to its 2 percent target, although he stressed that policymakers would continue monitoring incoming economic data.

His remarks came ahead of closely watched US employment figures, after payroll processor ADP reported weaker-than-expected private-sector job growth last month.

Oil prices also extended recent declines as optimism grew over ongoing US-Iran negotiations aimed at reducing regional tensions and ensuring uninterrupted shipping through the Strait of Hormuz, a key route for global crude exports.

However, market analysts cautioned that lower energy prices alone may not be enough to eliminate inflation risks, pointing to continued wage growth, supply chain adjustments, tariffs and geopolitical uncertainty as factors that could keep price pressures elevated.