November 5, 2025 (MLN): Asian markets fell sharply on Wednesday as investors fled artificial intelligence stocks, triggering a broad regional sell-off. Japan’s Nikkei Stock Average fell 4.65%, falling below the key 50,000 yen mark, and the TOPIX index fell more than 3%.
The plunge was led by SoftBank Group Corp., which fell more than 14%, following overnight losses for U.S. tech companies as enthusiasm for AI companies waned.
In South Korea, semiconductor giants Samsung Electronics and SK Hynix fell 7% and 8%, respectively, while Kospi fell more than 2%, CNBC reported.
According to LSEG data, the Kosdaq index fell 5.39% and the Korean won fell 0.6% to 1,449.50 won to the dollar, the lowest since April.
Elsewhere, Hong Kong’s Hang Seng Index fell 1.36%, mainland China’s CSI 300 Index fell 0.9%, and Australia’s S&P/ASX 200 Index recorded a modest decline of 0.77%.
The economic downturn comes as executives at Goldman Sachs and Morgan Stanley warned investors to prepare for a potential market correction over the next two years.
“The sell-off has finally started as ‘all the rally’ has stopped, following comments from CEOs and Capital Group that the market is in a period of correction,” said Andrew Jackson, head of Japanese equity strategy at Altus Advisors.
Overnight on Wall Street, the major U.S. indexes also fell, with the S&P 500 down 1.17% to 6,771.55, the Nasdaq Composite down 2.04% to 23,348.64, and the Dow Jones Industrial Average down 0.53% to 47,085.24.
Palantir Technologies shares fell about 8%, even though the company beat quarterly estimates and issued strong guidance driven by AI demand. Analysts said the decline reflects growing concerns that AI-related valuations are overheating, with the S&P 500 trading at more than 23 times forward earnings, close to levels last seen in 2000.
“If there wasn’t a pullback, valuations would have started to get very high,” Ameriprise’s Anthony Saglimbene said in an interview with CNBC.
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