AI uncertainty weighs on Asian shares as Wall Street recovers

Asian equity markets closed mostly lower on Thursday as a sharp sell-off in semiconductor and artificial intelligence (AI) shares weighed on sentiment. Markets with greater exposure to the global technology supply chain came under particular pressure following a leadership crisis at Nvidia. The company subsequently announced the immediate resignation of chief executive Jensen Huang, with chief financial officer Colette Kress appointed as interim chief executive. Given Nvidia’s central role in the global AI industry, the leadership change unsettled investors and triggered widespread selling among key Asian suppliers. 

Technology-heavy markets were particularly vulnerable as investors reassessed the sector’s elevated valuations and the potential implications of the leadership uncertainty for the broader AI industry. Japan’s Nikkei 225 declined by 0.70% to 60 819 points, while Hong Kong’s Hang Seng Index lost 1.48% to 23 956.92 points. The Shanghai Composite also slipped by 0.75% to 3 653.09 points. 

In contrast, US equities recovered from earlier losses on Thursday. The S&P 500 and Nasdaq 100 edged into positive territory, while the Dow Jones Industrial Average gained close to 200 points. Investors continued to assess the implications of Nvidia’s leadership transition for the broader AI industry, although the reaction was not uniform across the technology sector. Chipmakers AMD and Broadcom both gained more than 5%, while Alphabet advanced by nearly 3%, supported by its investment in expanding production of its own AI chips. Data centre operator Nebius, however, fell almost 16% after reporting delays to some of its capacity expansion projects. 

Beyond technology shares, other sectors recovered some ground following the day’s sell-off, which had been triggered by stronger-than-expected inflation data and renewed expectations of further Federal Reserve rate increases. 

European equity markets closed modestly higher on Thursday, supported by strong third-quarter corporate earnings, easing geopolitical tensions in the Middle East and a rotation away from AI-linked shares in the US and Asia. The STOXX Europe 600 reached a new record high of 664.01 points, up by 0.14%, while the EURO STOXX 50 gained 0.09% to 6 398.98 points. Germany’s DAX advanced by 0.57%, France’s CAC 40 gained 0.45% and the UK’s FTSE 100 rose by 0.29%. 

South African equities edged lower on Thursday, with resource and retail shares weighing on the market. Sentiment was further dampened by weaker mining data, after Statistics South Africa reported a 10.70% year-on-year contraction in mining output in September. This marked the fifth consecutive month of decline, reflecting pressure from high input costs, elevated fuel prices and ongoing structural constraints. 

The FTSE/JSE All Share Index declined by 0.49%, closing at around 112 894.87 points, while the Resources index dropped by 1.74%. Metals and Mining fell by 2.25%. At 20h04 SAST, the rand weakened by 1.08% against the US dollar, trading at around R16.79. It also lost ground against the euro and pound, trading at R18.54 and R22.20, respectively. Meanwhile, the yield on the benchmark 2035 government bond remained broadly unchanged at around 8.46%. 

Crude oil prices climbed above $87 a barrel on Thursday, extending gains for a second consecutive session after reaching a ten-week low of around $86. Prices were supported by escalating tensions between the US and Iran, although signs of recovering supply from Saudi Arabia provided some offset. President Donald Trump’s comments that the US no longer needed an agreement with Iran also raised uncertainty over the prospects for renewed diplomatic engagement and the region’s oil supply outlook. Brent crude advanced 1.94% to $94.56 a barrel. 

Precious metals, however, traded lower, with gold declining by 2.75%, silver shedding 3.11% and platinum slipping by 1.14%.