Asia-Pacific markets fall, tracking Wall Street declines on AI valuation concerns

Asia-Pacific markets fall, tracking Wall Street declines on AI valuation concerns


Aerial view of vehicles being driven on the road through the central business district in Beijing, China.

Vcg | Visual China Group | Getty Images

Asia Pacific markets fell Wednesday, mirroring losses on Wall Street, which was pressured by declines in artificial intelligence-related names like Palantir.

Australia’s S&P/ASX 200 started the day down 0.19%.

Japan’s Nikkei 225 slid 0.25%, while the Topix lost 0.26%. South Korea’s Kospi fell 1.9% and the small-cap Kosdaq shed 0.95%.

Hong Kong’s Hang Seng index futures pointed to a slightly lower open at 25,917 compared to the index’s last close of 25,952.4.

These follow comments by the CEOs of Goldman Sachs and Morgan Stanley on Tuesday, who cautioned investors to brace for a drawdown over the next two years.

“Finally, a sell-off hits the tape as the ‘everything rally’ takes a breather after comments from the CEO’s of [Goldman Sachs], [Morgan Stanley], and Capital Group that markets were due a correction,” Andrew Jackson, head of Japanese equity strategy at Ortus Advisors.

Overnight in the U.S., the S&P 500 declined 1.17% to close at 6,771.55, while the Nasdaq Composite traded down 2.04% to finish at 23,348.64. The Dow Jones Industrial Average lost 251.44 points, or 0.53%, to 47,085.24.

Palantir shares shed about 8%, even after the software company beat Wall Street’s estimates for the third quarter and gave strong guidance, fueled by growth in its AI business.

AI stock gains have driven the S&P 500′s forward price-earnings ratio to above 23, near its highest level since 2000, per FactSet. As those stocks have lifted the broader market to new heights in recent months, Anthony Saglimbene of Ameriprise said in an interview with CNBC that without a pullback, valuations are beginning to get “really stretched.”

— CNBC’s Sean Conlon and Fred Imbert contributed to this report.



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