Asian shares track Wall Street lower as tech battered
Alphabet reports solid sales, but plans a lot more capex spending
Siver prices slump, Bitcoin hits lowest since Nov 2024
Amazon earnings due, BoE and ECB to decide on policy
(Updates prices as selling gathers pace throughout Asia session)
By Stella Qiu
SYDNEY, Feb 5 (Reuters) - Asian stocks slumped on Thursday as concerns about the exploding costs of AI investment encouraged a rotation out of tech, while a renewed slide in silver squeezed leveraged positions that were already under water.
Google parent Alphabet (GOOGL.O) reported solid results on Wednesday, but it was targeting capital expenditure of $175 billion to $185 billion this year, sharply above analysts’ estimates. Shares swung wildly - down over 6% at one point -before settling just 0.4% lower after-hours.
Investors have been rotating out of technology giants and into defensive stocks such as Walmart (WMT.O) amid fears of AI disruptions to jobs. The recent selloff, triggered by a new legal tool from Anthropic’s Claude large language model, has wiped out about $830 billion in market value since January 28.
Disappointing earnings results from Advanced Micro Devices (AMD.O) didn’t help either, with the chipmaker tumbling 17% overnight.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) tumbled 1.7%, weighed by a 3.6% plunge in South Korea’s KOSPI (.KS11) . Taiwanese shares (.TWII) lost 1.1% but financials and real estate outperformed.
Japan’s Nikkei (.N225) skidded 0.7%, while healthcare, real estate and utilities were all up.
“That increase in (Alphabet) capex was absolutely enormous,” said Tony Sycamore, analyst at IG.
“At a time when everyone is hyper-sensitive and hyper-nervous about what’s going on with the software companies, with what’s going on with CAPEX and AI valuations… I would have thought the reaction would be quite negative.”
U.S. stock futures attempted a recovery early in Asia but that quicky lost momentum. Both Nasdaq futures (NQc1) and S&amp;P 500 (ESc1) were last off 0.1%, while EURO STOXX 50 futures (STXEc1) slipped 0.3%.
Bitcoin prices also tumbled 1.8% to $71,404, the lowest level since November 2024.
Much attention is on Amazon’s (AMZN.O) results later in the day, as well as policy meetings from the Bank of England and the European Central Bank where rates are expected to be on hold.
<h3>SILVER TUMBLES AGAIN</h3>
Precious metals also dived on Thursday to snap two days of gains after an epic implosion last week saw them plunging from lofty record highs.
Silver (XAG=) tumbled 15% to $74.6 an ounce, just a touch above the recent low of $71.32. Gold also fell 1.8% to $4,863 an ounce.
The risk sensitive Australian dollar (AUD=D3) fell 0.4% to $0.6969, while the Kiwi (NZD=D3) also slipped 0.3% to $0.5984.
The Japanese yen (JPY=EBS) was steady at 156.82 per dollar, after falling for four straight days ahead of a general election on Sunday where polls are tipping a decisive victory for Prime Minister Sanae Takaichi, endorsing her spending ambitions that have raised concerns about the nation’s strained finances.
In the Treasuries market, the benchmark 10-year yield (US10YT=RR) slipped 2 basis points at 4.2595%. The U.S. non-farm payrolls report for January has been pushed back from its scheduled release on Friday to February 11 due to a four-day partial government shutdown that has now ended.
Oil prices fell on Thursday after two straight days of gains as the U.S. and Iran agreed to hold talks in Oman on Friday, despite differences about the agenda. (O/R)
U.S. West Texas Intermediate crude (CLc1) fell 1.4% to $64.23 per barrel, while Brent crude futures (LCOc1) also dropped 1.4% to $68.47 per barrel.
(Editing by Shri Navaratnam)

Google's financial results, explained in one place!

Asian shares fell sharply as concerns over rising AI investment costs led to a tech selloff, with Alphabet's increased capex plans contributing to market anxiety. The MSCI Asia-Pacific index dropped 1.7%, while silver prices plummeted 15%. Bitcoin also hit its lowest since November 2024. Investors shifted to defensive stocks amid fears of job disruptions from AI. Upcoming earnings from Amazon and policy decisions from the Bank of England and ECB are closely watched. Oil prices declined following talks between the U.S. and Iran.

- Asian stocks declined sharply as concerns over soaring AI investment costs led to a sell-off in tech stocks.  
- Google parent Alphabet announced a capital expenditure target significantly above expectations, contributing to market volatility.  
- Silver prices fell 15%, coupled with Bitcoin hitting its lowest since November 2024, as market participants anticipate earnings from Amazon and central bank policy decisions.

Reuters

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GLOBAL MARKETS-Asia shares slump as global tech selloff spooks investors, silver tumbles again