Asia markets tumble as AI stock sell-off deepens

November 05, 2025 (MLN):  Asian markets slumped sharply on Wednesday as investors fled from artificial intelligence-related stocks, sparking a broad regional sell-off. Japan’s Nikkei 225 plunged 4.65%, falling below the key 50,000 level, while the Topix index slid more than 3%.

The steep declines were led by SoftBank Group, which tumbled over 14%, tracking overnight losses in U.S. tech peers amid fading enthusiasm for AI-linked companies.

In South Korea, the Kospi dropped more than 2% as chip giants Samsung Electronics and SK Hynix lost 7% and 8%, respectively, CNBC reported.

The Kosdaq index fell 5.39%, while the South Korean won weakened 0.6% to 1,449.50 per U.S. dollar, its lowest level since April, according to LSEG data.

Elsewhere, Hong Kong’s Hang Seng Index fell 1.36%, mainland China’s CSI 300 slipped 0.9%, and Australia’s S&P/ASX 200 recorded smaller losses of 0.77%.

The downturn followed warnings from Goldman Sachs and Morgan Stanley executives, who cautioned investors to brace for potential market corrections over the next two years.

 “Finally, a sell-off hits the tape as the ‘everything rally’ takes a breather after comments from the CEOs, and Capital Group that markets were due a correction,” said Andrew Jackson, head of Japanese equity strategy at Ortus Advisors.

Overnight on Wall Street, major U.S. indexes also retreated, with the S&P 500 down 1.17% to 6,771.55, the Nasdaq Composite losing 2.04% to 23,348.64, and the Dow Jones Industrial Average slipping 0.53% to 47,085.24.

Shares of Palantir Technologies sank about 8%, despite the company topping quarterly estimates and issuing strong guidance driven by AI demand. Analysts said the pullback reflects growing concern that AI-related valuations have become overheated  the S&P 500’s forward price-to-earnings ratio has climbed above 23, nearing levels last seen in 2000.

“Without a pullback, valuations were beginning to get really stretched,” said Anthony Saglimbene of Ameriprise in an interview with CNBC.

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