Japan's Nikkei 225 fell 5.75% on November 4, extending a broader technology selloff that originated in US AI equities and is now rippling through Asian chip manufacturers, semiconductor suppliers, and regional equity indices. The move reflects a repricing of artificial intelligence valuations that is forcing institutional capital to reassess exposure across technology supply chains globally. The Nasdaq declined 5.52% on the same session, with chip-sector weakness spreading to Tokyo, Seoul, and Mumbai by market open.
The selloff began in US artificial intelligence stocks and has now triggered the sharpest regional contagion in Asian technology equities since the 2022 rate-cycle peak. According to Bloomberg Markets reporting on November 4, major semiconductor manufacturers including those dependent on AI infrastructure spending have seen valuations compress as investors repriced the probability and timeline of AI profitability. Japan's exporters, particularly chip-design and materials suppliers, absorbed the initial shock as the Nikkei declined alongside the Nasdaq. The cascade suggests limited regional decoupling from US sentiment shifts.
India's Sensex posted gains of 2,000 points in early-session trading, initially appearing to resist the selloff as Diwali-linked retail demand supported index heavyweights. However, Nikkei Asia reported on November 4 that the gains masked significant sector-level rotation away from technology and into financial services and consumer stocks. The divergence underscores that emerging-market resilience is conditional: Indian equity strength reflects portfolio rebalancing into non-tech holdings rather than investor confidence in the broader risk environment. Capital is rotating rather than holding.
The broader regional impact extends beyond equities into currency and commodity markets. Reuters reported that uranium prices fell 5.26% as reduced demand signals suggest lower expectations for energy-intensive AI buildout cycles. Silver declined 1.56% and gold 1.44%, reflecting modest risk-off positioning but not panic-level flight-to-safety buying. To be sure, some market participants frame the declines as healthy profit-taking after a sustained AI rally rather than a structural repricing, a position many fund managers continue to defend publicly.
The market mechanics of the selloff reveal the capital structure underpinning AI investment: concentrated positions in a narrow set of mega-cap technology stocks have created outsized leverage to sentiment shifts. When those positions unwind, liquidity constraints force spillovers into adjacent sectors and regions. Politico reported on November 4 that European equity weakness has followed, with Belgian and French tech-weighted indices absorbing secondary contagion. The signal is that AI market leadership has narrowed to an unsustainable concentration, and regional capital flows are now reflecting that fragility.