‘Sea of Red’ Hits Emerging Stocks as AI Concerns Jolts Markets

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN Business'Sea of Red' Hits Emerging Stocks as AI Concerns Jolts MarketsEmerging-market stocks slumped, with a key gauge headed for a technical correction on mounting concerns the outlook for artificial intelligence no longer justifies the industry’s elevated valuations.Author of the article:Bhaskar Dutta, Abhinav Ramnarayan, Leda Alvim and Beatriz Amat You can save this article by registering for free here. Or sign-in if you have an account.Foreign exchange dealers inside a trading room at Hana Bank in Seoul. Photographer: SeongJoon Cho/Bloomberg Photo by SeongJoon Cho /Bloomberg(Bloomberg) — Emerging-market stocks slumped, with a key gauge headed for a technical correction on mounting concerns the outlook for artificial intelligence no longer justifies the industry’s elevated valuations.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountMSCI’s stock gauge for developing markets dropped as much as 2.8% to 1,617.21, extending losses from a bull-market peak to 10% in intraday trading on Friday. A close at or below 1,622.49 would confirm a correction.Chip stocks had recently wrapped up their best-ever quarter, extending a surge driven by insatiable demand for artificial intelligence. But the sector has faced turbulence in the past few weeks on concerns about competition, possible overcapacity and whether the billions of dollars in AI investments will pay off.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe overall move across asset classes today “reflects a classic ‘risk off’ swing in trading,” said Scotiabank strategists Shaun Osborne. “The equity screens are a sea of red on renewed concerns about the tech/chip cycle and escalating US/Iran attacks.”Benchmark stock indexes in Japan and Taiwan, both heavy on technology shares, plunged at least 4% each. AI bellwether Taiwan Semiconductor Manufacturing Co. slid after a lofty spending forecast, even as earnings beat estimates.“Growing concerns over semiconductor valuations following their vertiginous rise through the end of June has pushed investors toward greater caution,” said Rajeev De Mello, global macro portfolio manager at Gama Asset Management SA. “Seasonally thinner liquidity during the Northern Hemisphere summer has amplified the selloff.”The region-wide plunge in equities came even as South Korea’s Kospi index — the poster boy of the blistering AI rally and a gauge that’s seen wild swings — was closed for a holiday. Despite the selloff, traders continue to plow cash into the BlackRock’s $22.4 billion iShares MSCI South Korea ETF, known by its ticker EWY. The fund, which allocates roughly a quarter of its portfolio to Korea-listed SK Hynix shares, has seen over $2.8 billion in inflows this week, heading for its best weekly inflow on record, according to data compiled by Bloomberg.The latest round of hostilities between the US and Iran pushed crude oil prices higher, stoking concerns about inflation and strained public finances for fuel importers. Oil rose above $87 per barrel after Axios reported that the US is sending dozens of refueling planes to Israel, raising expectations of a near-term escalation in the conflict that has roiled energy markets. In the latest round of hostilities, Iran attacked Kuwaiti water and power plants, with many power-generation units sustaining damage. That came after the US carried out another wave of strikes on Iran, hitting targets including defense sites, in a sixth straight day of hostilities. Meanwhile, a gauge of EM currencies fell 0.3%, with the South African rand and the Mexican peso among the worst performers, while Bloomberg’s Dollar Spot Index gained 0.1%.Elsewhere, Mozambique is making progress toward a debt restructuring deal with China and is seeking a new International Monetary Fund program this year, President Daniel Chapo said. —With assistance from Ravil Shirodkar.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.