Asian stocks opened lower on Friday, October 9, as doubts about artificial intelligence spending hit Wall Street. The MSCI Asia Pacific index fell 0.1% in early trade. Markets in South Korea and Taiwan stayed shut for holidays. Meanwhile, Indian IT stocks faced pressure after the US suspended several major firms.
Asian equities opened lower on Friday, October 9, after a sell-off on Wall Street, driven by fresh doubts over the sustainability of the artificial intelligence spending boom.
The MSCI Asia Pacific index slipped 0.1% in early trade. In Japan, the Nikkei lost more than 1% at the open before paring losses to trade 0.58% lower, while the Topix was down around 0.15%. Hang Seng futures edged up 0.1%.
South Korea and Taiwan sat out the session as both markets were shut. The Kospi was closed for Hangul Day, which marks the creation of the Korean alphabet, while Taiwan was closed for its national day.
The Japanese yen weakened 0.1% to 158.06 per dollar, and the offshore yuan barely moved at 6.7034.
US technology shares bore the brunt of Thursday's selling. The Nasdaq 100 sank 1.4%, its steepest one-day fall in seven weeks, while a gauge of US chipmakers plunged 3.4%. The S&P 500 shed 0.5%. The damage stayed narrow, however. More than two-thirds of S&P 500 members rose, small caps barely budged, and investors shifted into defensive sectors.
A Financial Times report triggered the slide. It said OpenAI's annualised revenue sat $20 billion below levels it had previously signalled, with the ChatGPT maker on course for roughly $50 billion.
In India, the GIFT Nifty, which indicates how the stock market could open, pointed to a muted start in the green. Indian IT stocks were expected to face pressure at the open.
On Thursday, the US Labor Department suspended Microsoft and Adobe from its Permanent Labor Certification (PERM) Program, citing multiple active federal investigations, according to the US Labor Secretary. The department also said it would neither accept nor process new applications from firms such as Cognizant, Infosys, Capgemini, Wipro, TCS and HCLTech.
NASSCOM, the IT industry body, said Indian companies had cut their reliance on H-1B visas and steadily widened local hiring in the US. It added that few employees move from H-1B status to permanent residency through the PERM process.
US Treasuries rallied on Thursday after solid demand at a 30-year auction pulled long-dated yields back from highs not seen in more than two decades. The rally gathered pace after US President Donald Trump said he would not attack Iran again before the US midterm elections on November 3.
Even so, a months-long selloff in long-term debt has rested on fears that the Iran war would keep energy prices and inflation high, alongside concerns over government finances.
US Federal Reserve Governor Christopher Waller said further rate rises would probably be necessary to tame inflation, according to a Bloomberg report.
Oil slipped as Trump's pledge eased fears of fresh conflict with Iran. Brent crude, the global benchmark, fell 0.5% to around $103.80 a barrel. West Texas Intermediate also lost 0.5%, dropping to about $91.05.