Asian Equities Test Resilience as AI Concerns Hammer Tech Sector

Asian stock markets delivered a mixed performance this week as artificial intelligence fears continue to hammer technology and software stocks across the region. The selloff in traditional IT services marks a significant market rotation as investors worldwide reassess their exposure to companies potentially threatened by AI disruption. Meanwhile, commodity prices staged a notable rebound, with gold and oil both gaining ground amid geopolitical tensions in the Middle East.

AI Surge Tests Traditional Software Provider Models

The recent launch of advanced AI legal tools by Anthropic—the developer behind the popular Claude chatbot—has triggered a widespread retrenchment from software and IT service stocks. This technological breakthrough has prompted investors to test the durability of traditional software business models, raising questions about future revenue growth in the sector.

The impact on Japanese IT firms was particularly severe. TIS, a major IT service management company, plunged 15.8 percent, while NS Solutions and Trend Micro both slumped by 7.4 percent. Chip-related equipment makers also felt the hammer of technology sector weakness, with Advantest and Tokyo Electron each declining more than 2 percent. The broader Nikkei 225 Index slid 0.8 percent to 54,293.36, while the Topix Index posted a modest 0.3 percent gain at 3,655.58.

Commodities Rebound While Tech Takes a Hammer

In sharp contrast to technology’s struggles, precious metals staged a powerful rebound. Gold prices surged nearly 3 percent to $5,080 an ounce in Asian trading, while oil extended overnight gains following the U.S. Navy’s interception of an Iranian drone near an aircraft carrier in the Arabian Sea.

The commodity strength provided support to mining-dependent markets. Hong Kong’s Hang Seng Index finished marginally higher at 26,847.32 as precious metals continued to gain ground after earlier weakness. The benchmark S&P/ASX 200 Index in Australia climbed 0.8 percent to 8,927.80, while the broader All Ordinaries Index closed 0.6 percent higher at 9,204.60, boosted by recovery in copper and gold prices.

Regional Markets Show Mixed Verdict on Sector Rotation

China’s Shanghai Composite Index advanced 0.9 percent to 4,102.20 as solar-related stocks jumped following reports that teams from SpaceX and Tesla had visited domestic solar companies. This isolated bright spot highlighted how market sentiment continues to test different investment themes across Asia.

South Korea emerged as a clear outperformer, with the Kospi surging 1.6 percent to 5,371.10. Strong institutional buying and the ruling Democratic Party’s commitment to swift capital market reform measures provided significant support. New Zealand’s S&P/NZX-50 Index ended modestly higher at 13,467.29, up 0.3 percent.

The divergence across Asian markets reflects a broader test of investor conviction during a period of rapid technological change. While some regions found support from commodity strength and select sector rotations, the technology-driven decline remains a significant headwind, particularly in markets with heavy exposure to software and IT services.

In contrast, U.S. markets also fell from near-record levels overnight as investors rotated away from technology into economically sensitive shares. The Nasdaq Composite dropped 1.4 percent, the S&P 500 shed 0.8 percent, and the Dow fell 0.3 percent, underscoring the global nature of the technology sector’s challenges.