(RTTNews) - Asian stocks retreated on Thursday as AI-related concerns triggered a sharp sell-off in semiconductor shares.
South Korea and Japan experienced acute selloffs after reports emerged that Apple Inc. is in negotiations to purchase chips from two Chinese semiconductor makers on a Pentagon blacklist to reduce the impact of an ongoing global memory chip shortage.
Additionally, it was reported that U.S. tech giant Meta Platforms plans to rent its artificial intelligence infrastructure to other companies, fueling concerns that the company may have built more AI computing capacity than it currently needs.
The U.S. dollar and Treasury yields were little changed in Asian trade ahead of the key monthly jobs report due later in the day, with consensus estimates pointing to a slowdown in hiring in June. The jobless rate, meanwhile, is expected to hold steady at 4.3 percent.
Gold rose toward $4,100 an ounce, extending an overnight rebound after Fed Chair Kevin Warsh and European Central Bank President Christine Lagarde both said price risks have come down in recent weeks.
Brent crude futures fell more than 1 percent below $71 a barrel, reaching their lowest level in late February on signs of improved tanker traffic through Strait of Hormuz.
An average of 10 million barrels of crude oil is now moving through the Strait of Hormuz with American military support, a U.S. official said.
China's Shanghai Composite index fell 2.03 percent to 4,028.90 amid heavy losses in the chipmaking sector and concerns over Beijing's expanding anti-tax evasion campaign.
Hong Kong's Hang Seng index rose 0.76 percent to 23,055.03 due to bargain hunting after recent losses.
Japanese markets tumbled as tech stocks fell sharply on concerns that the artificial intelligence-driven rally may have gone too far, too fast. A sell-off in government bonds on renewed fiscal concerns also weighed on markets.
The Nikkei average slumped 2.47 percent to 68,733.15 while the broader Topix index finished marginally higher at 4,014.98.
Among the prominent decliners, Kioxia Holdings plunged 13.5 percent, Advantest plummeted 10 percent and Tokyo Electron gave up 7.4 percent.
Seoul stocks nosedived as semiconductor shares sold off heavily on renewed concerns over excess capacity.
The Kospi index plummeted 7.89 percent to 7,648.09 despite bourse operator KRX activating a sell-side sidecar for the index earlier in the day, halting program trading for five minutes.
Chipmakers Samsung Electronics and SK Hynix lost 9.1 percent and 14.6 percent, respectively on concerns about intensifying competition.
Australian markets ended on a flat note as gold miners and banks gained ground, offsetting losses in utilities and consumer discretionary stocks.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 index slipped 0.21 percent to 13,582.19, extending losses from the previous session on concerns that the AI-led global rally has outpaced underlying fundamentals.
Overnight, U.S. stocks ended slightly lower, with chipmakers falling on concerns over lofty valuations and big AI spending.
The United States and Iran concluded a round of indirect talks on Wednesday without clear progress toward a lasting peace.
While U.S. President Donald Trump touted progress towards 'denuclearization', Iran's Deputy Foreign Minister Kazem Gharibabadi said the countries had agreed to establish a communication channel to report and record violations of their initial MoU.
In economic news, a survey showed U.S. manufacturing activity slowed in June after surging in the prior month. ADP said U.S. businesses added 98,000 new jobs in June - the smallest increase in three months.
At the annual ECB Forum in Sintra, Portugal, Fed Chair Kevin Warsh said inflation risks have eased in recent weeks while repeating his determination to bring inflation back to the 2 percent target. He avoided giving any rate path guidance.
The Dow finished marginally higher after reaching a record closing high in the previous session.
The tech-heavy Nasdaq Composite dipped 0.7 percent and the S&P 500 slid 0.2 percent, with gains in Meta Platforms helping cushion overall losses to some extent.
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