Asian Shares Decline As Tech Stocks Plunge On Valuation Concerns

(RTTNews) - Asian stocks tumbled on Wednesday as tech stocks succumbed to heavy selling pressure on increasing worries over stretched valuations and AI bubble.

Uncertainty surrounding the Federal Reserve policy and signs that the U.S. is edging closer to stagflation also kept investors on edge.

China's Shanghai Composite index ended up 0.23 percent at 3,969.25, reversing early losses after a private survey showed China's services sector continued to expand in October, but at its slowest pace in three months.

Hong Kong's Hang Seng index cut early losses to finish marginally lower at 25,935.41 after China's State Council's tariff commission said it would suspend an additional 24 percent additional tariff on U.S. goods for one year but retain a 10 percent levy.

Japanese markets slumped after the Bank of Japan's September meeting minutes showed board members debated the growing case for a rate hike.

The Nikkei average ended down 2.50 percent at 50,212.27, after having plunged 4.7 percent to 49,073.58 earlier, slipping below the psychologically important 50,000 level for the first time since October 27. The broader Topix index settled 1.26 percent lower at 3,268.29.

Among the prominent decliners, Advantest lost 6 percent, SoftBank Group shares plummeted 10 percent and Hitachi Construction Machinery nosedived 12.2 percent.

Seoul stocks ended sharply lower on valuation concerns and fears of an AI bubble in the U.S.

The Kospi average fell 2.85 percent to 4,004.42 after repeatedly hitting record closing highs in recent sessions. At one point, the index dropped more than 6 percent to 3,867.81.

Tech heavyweights led losses, with Samsung Electronics tumbling 4.1 percent and SK Hynix falling 1.2 percent.

Australian markets ended slightly lower, recouping some early losses after China suspended retaliatory tariffs on major U.S. agricultural products including soybeans, corn, wheat, sorghum, and chicken for one year.

The benchmark S&P/ASX 200 slipped 0.13 percent to 8,802, extending losses for a second straight session as weak iron ore prices weighed on the mining sector. The broader All Ordinaries index closed down 0.30 percent at 9,071.20.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index inched up 0.11 percent to 13,620.98, notching a new record high as weak jobs data reinforced investor views of a rate cut later this month.

The dollar steadied in Asian trade while spot gold rose over 1 percent to $3982 an ounce after its sharpest decline in more than a week.

Oil prices were a tad lower after industry data indicated the biggest increase in U.S. inventories in more than three months.

U.S. stocks ended lower overnight, the dollar climbed to a four-month high against the euro and Treasuries rose after the CEOs of Goldman Sachs and Morgan Stanley cautioned investors about possible bubble in equities, adding to jitters over highly elevated valuations for many artificial intelligence companies.

The tech-heavy Nasdaq Composite tumbled 2 percent, the S&P 500 gave up 1.2 percent and the Dow declined half a percent.