Asian Markets Slide as AI Tech Sell-Off Spreads; KOSPI Drops 8% and Triggers Circuit Breaker

On Friday morning, South Korea's KOSPI index dropped 8.2%, and regulators halted program trading for 20 minutes. It was the sharpest point in a technology-led sell-off that swept across Asian markets and left investors asking whether the artificial intelligence rally had run too far, too fast.

The damage was wide. Japan's Nikkei 225 fell 5%. Hong Kong's Hang Seng lost 2.4%, China's blue-chip CSI300 slipped 2.9%, and the Shanghai Composite shed more than 2%. The MSCI Asia-Pacific index excluding Japan fell 3.8%, putting it on course for its biggest weekly decline in over a year. Friday also followed another broad-based sell-off across the region on June 23.

The trigger came from Wall Street overnight. Apple lost nearly $250 billion in market value after announcing price increases for iPads and MacBooks, meant to offset rising memory and storage chip costs. Its shares fell 6.1%. The move raised a concern that the cost of building out AI infrastructure and buying semiconductors is starting to squeeze even the world's largest technology companies.

It also cut against the mood of a day earlier. Memory-chip maker Micron Technology had reported blockbuster earnings that boosted optimism about AI demand and sent its shares to record highs. Apple's announcement quickly overshadowed that.

Charu Chanana, chief investment strategist at Saxo, told Reuters that Apple's price rises showed how big tech may eventually feel the pain of higher component costs. She said that could become a broader headwind for the ecosystem, and that higher input costs, heavier capital spending and rising funding needs are making investors more selective about AI exposure.

Tech-focused indexes in Asia took the worst of it. China's CSI Artificial Intelligence Index dropped 5%, and the CSI 5G Communication Index fell 6.3%. Zhongji Innolight, an optical module maker and key supplier to global AI infrastructure, lost nearly 6%. Hong Kong's Hang Seng Tech Index slid 3.3% and was headed for its worst week since October 2025.

Analysts also pointed to quarter-end profit booking after one of the strongest rallies in years. The scale of that rally is clear in the quarterly numbers: even after Friday's crash, the KOSPI is up about 62% for the quarter, the Nikkei has gained roughly 34%, and the MSCI Asia-Pacific index is still up more than 20%.

Other pressures added to the caution. Nasdaq futures fell 1.7% in Asian trading after reports that OpenAI may delay its long-awaited public listing until next year, raising questions about valuations across the AI sector. Oil offered no comfort: Brent crude fell below $74 a barrel as Saudi Aramco resumed shipments from its Ras Tanura export terminal after months of disruption, but the lower price did little for sentiment. In currency markets, the yen hovered near a 40-year low against the dollar, renewing speculation that Japanese authorities could step in to support it.

Market participants said the sell-off does not necessarily mark the end of the AI boom. Rather, it reflects worry that valuations became stretched after months of relentless gains. With technology stocks responsible for a large share of this year's global equity returns, any hint of pressure on earnings or margins is prompting investors to trim risk quickly. What to watch next is whether chip costs and valuation concerns persist, whether the OpenAI listing timeline slips, and whether Japan acts on the yen.