The global stock market rout deepened as more than $500bn (£384bn) was wiped off the value of artificial intelligence (AI) chipmakers. South Korean shares sank by as much as 6.2% while Japan’s benchmark Nikkei index tumbled over 4% at one point.
Nvidia supplier Advantest dropped as much as 10%, while Taiwan Semiconductor Manufacturing Co (TSMC) fell more than 3%. The moves helped erase around $500bn from two key indices tracking semiconductor stocks.
Stocks retreated from record highs after key figures on Wall Street appeared to question the valuations of equity markets. The bosses of Goldman Sachs and Morgan Stanley both suggested a correction was imminent over the next one to two years.
Meanwhile, it emerged that Michael Burry, the investor depicted in The Big Short who bet against the housing market ahead of the global financial crisis, had placed heavy positions against Palantir and Nvidia. Palantir sank nearly 8% on Tuesday after its projections in its third quarter results failed to impress investors.
Chris Weston, head of research at Pepperstone Group, said: “It’s a sea of red across broad markets, and one that offers a gloomy and damp portrayal of risk. We need to remain open-minded to the possibility that this could still further build. Simplistically, there aren’t many reasons to buy here.”