Asian Stocks Slide as AI Spending Fears Deepen: Oil Rises

Quick Answer: Asian stocks struggled on Nov 3 after another AI-fuelled tech selloff on Wall Street, with the Kospi down more than 3%. Oil clawed back part of Monday’s more than 7% plunge after a report that US forces struck an Iranian island in the Strait of Hormuz. The report does not name Bursa Malaysia, so local shareholders should track how AI spending plans and oil prices affect the regional tech names they hold.

Why Are Asian Stocks Sliding as AI Spending Fears Deepen?

Asian stocks AI spending fears on the stock market trading screen — Investors are questioning whether AI spending will earn a profit.

Asian stock markets struggled on Tuesday after another AI-fuelled tech selloff on Wall Street overshadowed a possible breakthrough in talks to end the Middle East war. Investors are asking whether the vast sums going into artificial intelligence will generate profits.

Amazon, Alphabet, Meta and Microsoft show they will keep pouring hundreds of billions of dollars into data centres and chips. Investors are growing impatient for returns.

Apple posted forecast-topping sales and profits on Monday. It warned that its gross margin, the percentage of sales left after output costs, would drop in October-December.

Anthropic posted a more than 1,100% surge in quarterly revenue and nearly US$900 billion (RM3.67 trillion) in spending commitments. The AI firm counts down to its Wall Street listing later this month.

Surging borrowing costs have raised concerns about some companies’ huge debts, adding downward pressure to stock prices.

How Far Did Chip Stocks Fall in Seoul and Wall Street?

SK hynix tanked 5% in Seoul on Tuesday.
Samsung fell 4.2%, dragging the Kospi down more than 3%.
The Nasdaq ended 1.1% lower on Monday after its Asian peers slid.

Taipei, Shanghai, Singapore, Manila, Bangkok and Jakarta also fell. Hong Kong, Sydney, Mumbai and Wellington edged up.

Tokyo was closed for a holiday, while London, Frankfurt and Paris opened with losses.

Why Didn’t Cheaper Oil Lift Tech Stocks?

Stephen Innes of SPI Asset Management said the collapse in crude “should have been rocket fuel for the battered growth trade”. Cheaper energy normally eases rate pressure and gives long-duration tech a boost.

Instead, the Nasdaq handed back its entire opening bounce and broke Friday’s lows. Innes said the selling is “being driven by something deeper than oil, yields or the dollar”.

What Is Behind the Oil Rebound on the Iran Strike Report?

Crude jumped more than 1% on Tuesday after the Wall Street Journal reported that US forces struck Iran’s Qeshm Island. Iranian state media reported five explosions in rapid succession.

The Journal said the strikes were not publicly announced to avoid the impression Washington intended to resume major combat operations.

Are Iran Peace Talks Close to a Deal?

US President Donald Trump signalled progress on Monday. He said: “We can end it at any time. If I can make a deal, I’d rather do it, save a lot of lives.”

Iran’s parliament speaker Mohammad Bagher Ghalibaf said “the ball is now in America’s court to prevent war”. National Australia Bank’s Rodrigo Catril cautioned that the US and Iran’s positions “have not materially changed”.

Iran wants US restraint, the lifting of the US naval blockade, relief from oil sanctions and the unfreezing of at least $12 billion in assets. Washington wants concessions on Iran’s nuclear programme, which Tehran plans to discuss later.

What Does the AI Selloff Mean for Bursa Malaysia Shareholders?

The AFP report does not mention Bursa Malaysia or any Malaysian listed company. Its market moves cover Seoul, Taipei, Singapore and Jakarta, but not Kuala Lumpur.

Stocks worth monitoring are the AI spenders named above, plus any Bursa-listed firms tied to their data centre or chip supply chains. Readers can explore AI Stock Analysis for Malaysians to track these links.

Key Takeaways

Investors are questioning whether AI capex will earn returns, with Amazon, Alphabet, Meta and Microsoft still spending heavily.
Apple warned its gross margin would drop in October-December.
SK hynix fell 5% and Samsung 4.2%, pulling the Kospi down more than 3%.
Oil rebounded more than 1% on the Qeshm Island strike report after a more than 7% fall on Monday.
Iran wants at least $12 billion in frozen assets released before any concessions on the Strait of Hormuz.

This article is for general information only and is not financial advice. Do your own research before making any investment decision.

Frequently Asked Questions

Why are Asian stocks falling on Nov 3?

Asian stocks struggled after another AI-fuelled tech selloff on Wall Street. Investor doubts over whether AI spending will earn profits weighed on trading, with SK hynix down 5% and Samsung down 4.2% in Seoul.

Why did oil rebound after the Monday plunge?

Crude jumped more than 1% on Tuesday after the Wall Street Journal reported that US forces struck Iran’s Qeshm Island. Oil had fallen more than 7% on Monday.

Did Bursa Malaysia fall with Asian markets on Nov 3?

The AFP report does not mention Bursa Malaysia. Check the closing level of the FBM KLCI for the local market move.

How much did Anthropic’s revenue rise?

Anthropic posted a more than 1,100% surge in quarterly revenue. It also reported nearly US$900 billion (RM3.67 trillion) in spending commitments ahead of its Wall Street listing later this month.

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