AI Sell-Off Hits Asia: Nikkei, Kospi Crash

The Philadelphia Semiconductor Index lost 12.25% in a single session on Thursday, its worst day since March 2020. Nvidia, the company that became the face of the AI boom, fell 9.3% and lost about $447 billion of market value in one day. By Friday morning, the selling had crossed the Pacific.

What happened on Wall Street

Thursday was brutal. The Nasdaq composite sank 5.52% to 24,315.00, its worst day since April 2025, and the S&P 500 fell 4.36% to 7,353.73. The Dow Jones Industrial Average dropped 1,833 points, or 3.44%, to 51,523.06. The Nasdaq is now 11.9% below the all-time high it set last month, which puts it in what traders call correction territory.

The pain was concentrated in the chip stocks that power the AI trade. The Philadelphia Semiconductor Index, which tracks 30 chip companies, closed at 9,011.14. AMD tumbled 17.3%, CoreWeave fell 9.8% and GE Vernova, which helps power data centres, sank 7.5%. Nvidia was by far the heaviest weight on the S&P 500. It is now down 2.6% for the year so far, after annual gains of roughly 39%, 171% and 239% in the last three years.

The scale of the reversal is what startled traders.

How Asia followed on Friday

Index	Intraday fall	Close
Nikkei 225 (Japan)	Over 7%, to 56,745.81	6.0% lower, worst day since April 2025
Kospi (South Korea)	8.8%, to 4,911.28	6.0% lower, weekly loss 12%
Taiex (Taiwan)	Not reported separately	4.5% lower
Hang Seng (Hong Kong)	Not reported separately	0.7% lower
Shanghai Composite (China)	Not reported separately	1.3% lower

South Korea's Kospi fell so fast that trading was halted for 20 minutes after a circuit breaker was triggered. Chip giant SK Hynix fell more than 10%, Samsung Electronics shed 7.9% in morning trade, Japan's SoftBank Group dropped more than 10% and Taiwan's TSMC fell 4.7%.

Why investors are selling

The immediate trigger was Tuesday's US midterm elections. The Democrats' sweeping victory raised the possibility that governments could force pauses in the construction of more data centres. Voters across political parties say they are wary about AI and do not like the increases to power bills caused by data centres. Any slowdown in data-centre construction would mean fewer purchases of AI chips, and Asia makes most of those chips.

But two things need to be said plainly. First, no new rule has actually taken effect. Others argue the fear is overdone: a more measured pace of spending could even ease worries about stretched valuations. Second, the midterm result landed on older worries: that borrowing to build data centres has become very expensive, and that AI stock prices had shot too high.

Oil added to the gloom. Brent crude climbed back near $100 a barrel as tension over Iran and the Strait of Hormuz continued, and gold fell 1% as investors sold positions to cover losses elsewhere. Money moved into bonds instead: the yield on the 10-year US Treasury fell to 4.84%.

India went the other way

India was the outlier. The Nifty opened flat, then climbed about 0.66% to 24,698 by early afternoon, and closed 2.01% higher at 25,030.35. The Sensex crossed 80,000 during the day and closed 1,718 points higher at 81,028.02. It was the seventh straight winning session for both indices.

Three things supported Indian markets. Foreign institutional investors bought ₹14,974.68 crore of equities on Thursday, their biggest single-day net purchase in almost six years. Crude prices had been moderating earlier in the week, and corporate earnings and a firmer rupee helped sentiment. Even Indian IT stocks rose more than 1%, while their US counterparts were among the hardest hit overnight. One strategist quoted in market reports said India was likely to be the least affected by the US rout, and that a slower AI trade could even turn out to be beneficial for India.

What Indian investors should watch

• Do not read Friday's global fall as an India story. On the day, India-specific drivers, FII flows, earnings and the rupee, mattered more than the Nasdaq.
• Watch US chip stocks and any concrete data-centre proposal from the new Congress. So far there is only fear, not a rule.
• Watch crude. Brent near $100 a barrel is the second pressure point for India after global tech sentiment.
• Watch Nvidia's results on 17 November. They will be the next hard test of whether AI spending is actually slowing.

This story is informational only and is not financial advice.

Glossary

• Circuit breaker: a trading halt triggered automatically when an index falls sharply, giving the market a short pause. South Korea's lasted 20 minutes.
• Semiconductor index: the Philadelphia Semiconductor Index tracks 30 chip design, manufacturing and equipment companies. It is the benchmark for the chip sector.
• Correction: a fall of more than 10% from a recent high. The Nasdaq entered correction territory on Thursday.

What happens next

Indian markets open for a special Muhurat trading session on Sunday, 8 November, for Diwali Laxmi Pujan. Asian markets reopen on Monday, 9 November, and the first question is whether buyers return or Friday's losses extend. Nvidia reports results on 17 November, and any concrete data-centre regulation proposal from the new US Congress would be the next real trigger, not the election result alone.

Further reading

• The Hindu BusinessLine: Nikkei plunges 5.7%, Kospi falls 7.4%
• Morningstar / Dow Jones: Asian equities tumble as AI selloff deepens
• Upstox: Asian markets crash, Nikkei tumbles 7%, Kospi plummets 8.7%
• The Hindu BusinessLine: Sensex reclaims 80,000, Nifty tops 24,700
• Moneycontrol via TradingView: Sensex jumps 1,700 pts, Nifty closes above 25,000

📷 फोटो: Kakidai, Wikimedia Commons (CC BY-SA 4.0)