Asian Stocks Slip as Tech Shares Track U.S. Weakness, but Japan and South Korea Log Strong February

Tech-Led Declines Weigh on Asian Markets

Asian technology stocks came under pressure on Friday as investors mirrored the risk-off stance seen in U.S. tech giants. The retreat followed growing concerns about whether heavy investment in artificial intelligence can deliver sufficient returns and whether current market valuations accurately capture potential profitability.

Most regional bourses moved lower on the day, with the technology sector at the center of the decline. Market participants reassessed the sustainability of recent gains in AI-related names, leading to broad-based selling across Asia’s tech complex. This sector-specific weakness offset more positive underlying trends in some major indices over the course of the month.

Japan, South Korea, and Australia Stand Out in February

Despite the daily setback, stock markets in South Korea and Japan were on course for robust gains in February. The Nikkei 225 crossed the 59,000 level for the first time during the month, supported in part by central bank board picks that fueled what has been described as the “Takaichi trade.” Japanese equities also benefited from supportive economic data and corporate earnings.

South Korean stocks have advanced through February on the back of strong export figures and improving corporate fundamentals, which helped underpin broader market resilience even amid short-term volatility in technology names. Australia was likewise set for a strong month, in contrast to several other Asian bourses that were nursing February losses.

Across the region, market performance has been influenced by a combination of factors, including expectations for U.S. monetary policy, the outlook for China’s economic recovery, and the flow of local corporate earnings results. These drivers, alongside shifting views on AI-related investments, have contributed to diverging performance profiles between export-oriented and domestically focused markets.

FAQ

Why did most Asian stocks fall on Friday?
Most Asian stocks declined as technology shares tracked overnight weakness in U.S. tech giants, driven by investor concerns over the sustainability and valuation of AI-related investments.

Which markets performed strongly in February despite the daily losses?
Japan, South Korea, and Australia were all set for strong monthly gains in February, even though they participated in the broader regional decline on Friday.

What milestone did the Nikkei 225 reach?
The Nikkei 225 crossed the 59,000 level for the first time, supported by central bank board picks and broader strength in economic data and corporate earnings.

What broader factors are influencing Asian markets?
Asian markets are being shaped by U.S. monetary policy expectations, prospects for China’s economic recovery, and local corporate earnings results, alongside reassessments of AI-related investment returns.