Stock markets across Asia and beyond suffered sharp declines after US inflation data triggered a fresh wave of selling in technology shares. South Korea's Kospi 200 index, dominated by semiconductor makers, fell more than 8% overnight to a six-month low, with SK Hynix and Samsung Electronics dropping nearly 11% and 9.5% respectively. Japan's Nikkei 225 declined 4.9%, while chip maker Kioxia slumped 11% and SoftBank fell 10%. The sell-off extended to China, where Shanghai's CSI 300 index slipped as much as 2.4%, and Taiwan's TSMC dropped 2% despite reporting its sixth consecutive quarter of profits.
The sharp falls followed weakness on Wall Street, where the Nasdaq Composite fell 1.9% and the S&P 500 dropped 1.1%, posting its worst performance since July. The turmoil came after US inflation jumped to 3.7% in September, exceeding expectations and marking the fastest increase since May's three-year peak of 4.2%. Deutsche Bank analysts said the rises were broad-based across consumer goods rather than driven solely by energy costs. Investors now expect the US Federal Reserve to raise interest rates again, with some pricing in an increase by the end of the month.
European markets opened lower, with Germany's DAX down 0.53%, France's CAC 40 down 0.19%, Spain's Ibex falling 0.17%, and the UK's FTSE 100 down 0.06%. The International Monetary Fund warned earlier this week that an artificial intelligence share price crash could pose risks to global financial stability, with Asian markets most exposed to potential spillover effects.