Asia report: Most markets fall amid global tech sell-off
By Josh White
Date: Wednesday 05 Nov 2025
(Sharecast News) - Asia-Pacific equities fell sharply on Wednesday as a sell-off in AI-related stocks rippled through the region, following warnings from Wall Street executives that markets could face a correction.
Japan led declines as the Nikkei 225 plunged 2.5% to 50,212.27, dropping below the 50,000 mark earlier in the session before trimming losses.
The Topix slid 1.26% to 3,268.29.
"The rally that began in April is finally feeling its age. What we are seeing today wasn't just a dip; it was a full-scale reality check," said Stephen Innes, head of trading and market strategy at SPI Asset Management.
"Japan's Nikkei dropped over 4%, its biggest single-session hit in half a year, as traders bolted from the same AI and chip names they'd been worshipping all summer.
"SoftBank cratered as much as 14%, Advantest, Disco, and Furukawa were taken to the cleaners, and even the once-bulletproof Topix was left nursing bruises."
Losses were concentrated in technology and growth names, with Socionext tumbling 12.38%, Hitachi Construction Machinery down 12.17%, and SoftBank Group slumping 10.02%.
The pullback followed remarks by the heads of Goldman Sachs and Morgan Stanley, who cautioned investors to brace for a market drawdown over the next two years.
Innes noted that "this wasn't the usual intraday shake-out. It felt more like the oxygen suddenly thinning at the top of a mountain that everyone assumed had no summit.
"After months of crowding into the AI complex, investors are discovering that even the 'new economy' trades breathe the same air as the old one."
He added that "Palantir dropped 8% despite raising guidance - the kind of move that screams 'positioning exhaustion' rather than disappointment."
Kospi sinks in Seoul, Chinese equities manage gains
Elsewhere, South Korea's Kospi sank 2.85% to 4,004.42, weighed by steep declines in renewable energy and tech shares.
Hanwha Solutions plunged 14.94%, Hyundai Energy Solutions lost 12.24%, and LG CNS fell 11.48%.
Australia's S&P/ASX 200 slipped 0.13% to 8,802.00, as losses in tech and energy firms overshadowed gains in financials.
Megaport fell 9.66%, Paladin Energy dropped 8.93%, and DroneShield slid 7.45%.
Innes said that "from Wall Street to Shibuya, the story rhymes: the market has grown too narrow, too top-heavy, and too convinced of its own brilliance.
"Momentum has tripped over its own speed, and valuation has finally caught up to narrative."
He added that the mood across trading desks "feels more like disbelief than panic - traders still long, but looking around for hedging off ramps."
China's markets diverged from the regional trend, with the Shanghai Composite rising 0.23% to 3,969.25 and the Shenzhen Component up 0.37% at 13,223.56.
Gains in energy and tech names such as Geo-Jade Petroleum and Zhejiang Xinneng Photovoltaic Technology, both up over 10%, offset weakness elsewhere.
A private survey showed China's services activity expanded at a slower pace in October, with the RatingDog China general services PMI easing to 52.6 from 52.9, while the composite output Index fell to 51.8.
Economists said the results pointed to resilient domestic demand but continued drag from weaker exports and lingering property-sector stress.
Innes also observed that "the Takaichi-driven stimulus optimism that powered Japanese risk assets is fading into bureaucratic fog, as investors demand details over slogans.
"The 'pro-growth' honeymoon is giving way to the usual Tokyo ambiguity - a reminder that policy tailwinds, like rallies, eventually need something solid beneath them."
Hong Kong's Hang Seng Index slipped 0.07% to 25,935.41, with New Oriental Education down 3.18%, Zhongsheng Group off 2.34%, and Sunny Optical Technology losing 1.98%.
In New Zealand, the S&P/NZX 50 rose 0.11% to 13,620.98, supported by gains in Vista Group International, which climbed 4.38%, and Fisher & Paykel Healthcare, up 2.03%.
Data showed the country's unemployment rate rose to 5.3% in the September quarter, in line with forecasts, while employment growth stalled and wage pressures moderated - signs of a cooling labour market likely to keep the Reserve Bank of New Zealand on an easing bias.
Down under dollars weaken, oil prices rise
In currencies, the yen held steady at JPY 153.65 per dollar, while the Australian and New Zealand dollars weakened slightly to AUD 1.5436 and NZD 1.7725 per greenback, respectively.
Oil prices edged higher, with Brent crude futures last up 0.22% on ICE to $64.58 a barrel and the NYMEX quote for West Texas Intermediate rising 0.25% to $60.71.
Reporting by Josh White for Sharecast.com.
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