Asian Shares Retreat As AI-related Stocks Slump After Recent Rallies

(RTTNews) - Asian stocks declined on Friday amid a broad sell-off in semiconductor and artificial intelligence-related companies after Microsoft and Apple increased prices on some of their most popular products.

AI demand is boosting some sectors, but at the same time creating pressures elsewhere in the tech supply chain.

The dollar index weakened slightly as PCE inflation data matched expectations and traders adjusted Federal Reserve rate hike bets.

Gold was marginally higher at $4,030 an ounce while Brent crude prices fell more than 2 percent below $74 a barrel, reversing the previous session's gains.

China's Shanghai Composite index fell by 93.02 points, or 2.26 percent, to 4,027.26 after talks to sell a controlling stake in Evergrande Property Services Group collapsed.

Hong Kong's Hang Seng index ended down 405.05 points, or 1.76 percent, at 22,671.86 after a fresh bout of sell-off in technology companies. Alibaba Group Holding shares fell 5.8 percent.

Japanese markets slumped following an overnight sell-off in U.S. AI-linked and semiconductor shares. The Nikkei average tumbled 3,005.46 points, or 4.15 percent, to 69,360.88 while the broader Topix index closed 53.11 points, or 1.32 percent, lower at 3,963.36.

AI and chip names came under heavy selling pressure, with SoftBank, Advantest and Taiyo Yuden losing 10-13 percent.

The yen found footing near a 40-year low against the dollar as investors pared Fed rate-hike bets.

Seoul stocks nosedived as investors locked in profits after recent strong rallies. The Kospi index plunged 519.09 points, or 5.81 percent, to 8,411.21.

Among the biggest drags, Samsung Electronics, SK Hynix, SK Square and Kioxia Holdings plummeted 5-11 percent on worries that too expensive memory chips would raise prices of end-use products and discourage tech companies from increasing large-scale AI investment.

Australian markets edged up slightly after a choppy session. The benchmark S&P/ASX 200 rose by 15.50 points, or 0.18 percent, to 8,764.20 as mining and commodity-linked shares gained ground, offsetting losses in the healthcare and technology sectors. The broader All Ordinaries index closed up 12.60 points, or 0.14 percent, at 8,964.20.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index finished marginally higher at 13,495.24 amid expectations that the Reserve Bank will refrain from hiking the official cash rate next month.

Overnight, U.S. stocks ended mixed even as strong earnings and guidance from Micron and Qualcomm helped ease concerns over lofty AI valuations and spending.

Oil prices were in focus again after a cargo vessel was reportedly attacked off Oman, raising fresh security concerns and threatening maritime trade.

In economic news, the PCE price index, the Federal Reserve's preferred inflation gauge, rose 0.4 percent sequentially in May, slightly below expectations, and 4.1 percent year-over year.

The core PCE index rose 0.3 percent month-over-month and 3.4 percent annually, matching forecasts.

Consumer spending accelerated in May and personal income surpassed market expectations, reinforcing expectations that the Federal Reserve may raise interest rates later this year.

Durable goods orders, a key indicator of manufacturing activity, declined less than anticipated in the most recent reporting period, while claims for unemployment benefits fell more than expected last week, suggesting that the labor market remains robust.

Q1 GDP growth was unexpectedly revised up to an annualized rate of 2.1 percent in the first quarter of 2026 from 1.6 percent in the second estimate and 0.5 percent growth recorded in the fourth quarter.

The tech-heavy Nasdaq Composite dropped half a percent, extending losses for a fourth consecutive session after Apple and Microsoft raised the prices of some of their core products, citing higher component costs. The S&P 500 finished marginally lower while the Dow edged up by 0.1 percent.