Asian Stocks Slide as US Market Declines, China's Return Looms

Market Update: Asia Pacific Shares Fall Amid AI and Tariff Concerns

Asian shares edged down 0.2% at the open, with the MSCI Asia Pacific Index declining in response to fresh anxiety over the impact of artificial intelligence (AI) on company profits and lingering uncertainty over tariffs.

South Korea, a key indicator for AI investments, saw its shares fall 0.5%. The market will closely watch mainland China's markets, which are set to reopen after the Lunar New Year holiday period, for potential shifts in sentiment.

US tech, delivery, and payment shares were hit as Citrini Research outlined the potential AI risks to various industries. International Business Machines Corp. (IBM) tumbled 13%, its worst day since October 2000, following a report that Anthropic's Claude Code could help modernize COBOL, a programming language mainly run on IBM computers.

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The AI-driven disruption concerns are prompting traders to dump shares of companies perceived to be at risk of being displaced. Despite solid results from megacaps, doubts over whether big investments in AI will pay off soon are growing. Software companies have been among the hardest hit, with insurance brokers, private credit firms, cybersecurity, and real estate services stocks also caught up in the so-called AI scare trade.

MSCI Asia Pacific Index has outperformed the S&P 500 Index this year, rising 12% compared to a 0.1% decline in the US benchmark. This marks the index's strongest start to a year relative to the US benchmark on record.