HONG KONG: Asian stocks retreated on Thursday as technology shares led a broad selloff, with Wall Street earnings failing to quell worries over soaring AI investment costs, while escalating Gulf tensions boosted oil and weighed on risk sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 1.8% to the lowest level in nearly three months and was on track for a fourth straight week of decline.
Japan's Nikkei gave up earlier gains to trade 2% lower, Korean shares tumbled more than 4%, while China's blue-chip CSI300 fell 2%, pushing it to the brink of a technical bear market. Hong Kong's Hang Seng Index lost more than 3%.
Tech leaders in the region were among the biggest losers, with Japan's Tokyo Electron down more than 6%. Korea's SK Hynix and Samsung were down 5.7% and 4.2%, respectively, while Alibaba tumbled 6.5% in Hong Kong.
In early European trading, the pan-region Euro Stoxx 50 futures declined 0.9%. U.S. stock futures, the S&P 500 e-minis, dropped 0.8%.
Overnight, the tech-heavy Nasdaq led Wall Street to a slightly higher close. Space X posted its first profit as a public company and Meta reported third-quarter revenue that beat expectations, easing fears over the payoff from massive AI spending.
The optimism quickly evaporated in Asia, however, as investors refocused on AI costs, with Meta's plan to issue non-voting Class C stock reviving concerns over mounting capital commitments.
"There's a lot of noise out there at the moment and investors are still digesting this morning's results," said Kyle Rodda, senior financial market analyst at Capital.com.
"Also, we're really only at the start of the meaty part of earnings season, which is coming at the same time that investors are tackling the uncertainty from an upcoming Fed decision, geopolitical risks, and US mid-terms."
Those geopolitical concerns were reflected in oil markets. Brent crude rosemore than 2% to $111.03 a barrel, near a five-month high, after more Houthi attacks in Saudi Arabia raised the risk of wider conflict and supply disruptions in the Middle East.
A flight to safety pushed benchmark U.S. Treasury yields lower, with the 10-year yield falling nearly 6 basis points to 5.0857% and the 30-year yield touching a one-week low of 5.3850%.
French government bonds also remained under pressure after the 10-year yield climbed above 5%, as investors looked for signs the government can contain social unrest and bring spending under control.
In currencies, the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, dipped to 101.57. The euro was little changed at $1.1242.
The yen ticked up to 157.55 after Deputy Bank of Japan Governor Ryozo Himino signalled his readiness to raise borrowing costs. The Korean won was muted at 1324, after the Bank of Korea left its benchmark interest rate unchanged at 3.00% on Thursday.
Gold eased to $4,067.5 per ounce.
Bitcoin fell 2.2% to $82,771.05, while ether was also 2.2% lower at $2,436.3. - Reuters
