Asian markets experienced a sharp decline on Friday, with equity benchmarks in Japan and Taiwan falling as much as 6%, as a global rout in technology stocks accelerated. Japan’s benchmark Nikkei 225 gauge confirmed correction territory, down more than 10% since its all-time high close on June 25.

Analyst Reactions

Takamasa Ikeda, Senior Portfolio Manager at GCI Asset Management in Tokyo, stated, ‘The Nikkei is highly correlated with the SOX index. The pace of the SOX’s gain was unsustainable, and there’s been a correction in it. A correction was anticipated, but it is happening earlier than market expectations.’ Christopher Forbes, Head of Asia and Middle East at CMC Markets in Singapore, noted, ‘They were good tech earnings. But it just shows how much was baked into the price. SpaceX is a pretty good proxy for market sentiment right now, and it’s below the IPO price.’

Other analysts, such as Johan Javeus, Senior Economist at SEB in Stockholm, and Kei Okamura, Portfolio Manager at Neuberger Berman in Tokyo, also shared their insights on the market correction. Javeus stated, ‘Probably a combination of factors where the selloff is partly driven by profit-taking on many AI stocks, coupled with the recurring doubts of an AI investment bubble.’ Okamura said, ‘I think the Fed was likely a trigger. Kevin Warsh and his comments and changing views towards what appears to be quite hawkish Fed policy started a cascading effect towards taking chips off the table.’

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.