AI Uncertainty and Rising Oil Prices Fuel Volatility Across Global Markets

Global stock markets recorded mixed movements on Friday as investors assessed concerns over artificial intelligence (AI) spending, changes in monetary policy and rising crude oil prices. Asian markets came under pressure following a sharp decline in US technology shares, while the Bank of Japan's latest policy decision also drew attention.

Japan's Nikkei 225 fell 2.6 per cent to 62,960.60, while South Korea's Kospi dropped 5.4 per cent to 5,618.76. Shares of semiconductor companies SK Hynix and Samsung Electronics declined during trading. In contrast, Australia's S&P/ASX 200 rose 0.5 per cent to 8,937.60. Hong Kong's Hang Seng gained 1.2 per cent to 23,225.69, while the Shanghai Composite slipped 0.9 per cent to 3,618.14.

The regional decline followed losses on Wall Street, where Alphabet shares plunged 12.6 per cent on Thursday, marking their steepest single-day fall in more than 20 years. The decline renewed concerns over the scale of investments in AI infrastructure and whether the spending would generate sufficient returns. The Nasdaq Composite fell 1.4 per cent to 26,184.72, while the S&P 500 declined 0.3 per cent to 7,720.39. The Dow Jones Industrial Average lost 132.54 points, or 0.3 per cent, to close at 52,342.56.

The Bank of Japan (BOJ) kept its benchmark interest rate unchanged at 1.25 per cent after concluding its two-day policy meeting. The central bank had raised the rate to that level last month. Its decision came amid concerns over inflation and pressure on the yen, with further monetary tightening remaining under consideration.

In currency markets, the US dollar traded at 157.50 yen, compared with 157.65 yen earlier, while the euro rose to USD 1.1197 from USD 1.1181.

Meanwhile, crude oil prices increased. US benchmark crude rose 2.80 per cent to USD 104.86 per barrel, while Brent crude gained 2.54 per cent to USD 117.80. Supply concerns, including risks to shipping through the Strait of Hormuz, added to market uncertainty.

The yield on the 10-year US Treasury fell to 4.94 per cent from 5.05 per cent, reflecting demand for government bonds amid market volatility.