Asia stocks tumble as AI rout spreads: Nikkei plunges, Kospi triggers circuit breaker

Wall Street's rout in AI stocks spread to Asia on Friday, November 6. Japan's Nikkei 225 slumped 7% immediately after the opening bell, while South Korea's Kospi plunged as much as 8.55%, triggering a Level 1 circuit breaker and falling below the 5,000 mark. Chip giants TSMC, Samsung and SK Hynix all fell sharply. (Photo: Tokyo stock market, file photo.)

Japan and South Korea lead the slide; chip stocks hit hardest

The Nikkei gapped down more than 6% at the open and briefly fell below 57,000 before recovering to 57,576.63 by midday, still down 5.7%. Of its 225 components, 221 were lower, and the broader Topix fell roughly 5.4% to 5.8%. South Korea's Kospi was down 7.4% at 4,985.99 by midday after an intraday plunge of 8.55% triggered a 20-minute trading halt. Samsung Electronics fell about 8% to 10% and SK Hynix tumbled 12%; in Japan, Kioxia plunged 14% and SoftBank slid 11%, while TSMC fell as much as 8.5% in Taiwan.

The trigger: Wall Street plunge and regulation fears

The selling followed a brutal session on Wall Street on Thursday: the Nasdaq Composite tumbled 5.5%, the S&P 500 lost 4.4% for its worst day since the tariff shock of April 2025, and the Dow Jones Industrial Average sank 1,833 points, or 3.4%. Nvidia fell 9.3% and Advanced Micro Devices dropped 17.3%, while the Philadelphia Semiconductor Index plunged 12.3%. After Democrats swept both chambers in the November 3 midterm elections, investors fear Washington will tighten scrutiny of big tech and data-centre construction, slowing the AI buildout.

Doubts grow over returns on AI investment

Beyond politics, doubts are growing about the returns on companies' enormous AI infrastructure spending — when, if ever, it will translate into profits. Nomura Securities strategist Wataru Akiyama told Reuters that funds previously flowing into AI and semiconductors were shifting to other sectors, while AMP chief economist Shane Oliver said richly valued technology shares had been vulnerable even before the vote.

Losses eased later in the session as dip buyers emerged, and Nasdaq futures were up 1.4%, though sentiment remained fragile. Hong Kong's Hang Seng fell 0.7% to 24,630.03, the Shanghai Composite dipped 1.3% to 3,642.10, and Australia's S&P/ASX 200 lost 1.0%. Analysts warned volatility could persist as investors reassess AI timelines and costs.