Berliner Boersenzeitung - Asian markets limp into weekend as AI bubble fears grow

While some markets hit record highs along with gold and bitcoin, talk is growing that valuations among some companies may have run too high, sparking talk of a pullback.

Buying sentiment got another boost this week from news that ChatGPT-maker OpenAI had signed multi-billion-dollar chip deals with South Korean titans Samsung and SK hynix as well as US firm AMD.

The spending added to the hundreds of billions already pumped into the sector as firms look to get ahead on the sphere of artificial intelligence.

That in turn has seen investors flood into the tech sector, sending stock prices rocketing -- with US chip leader Nvidia topping a $4 trillion market capitalisation.

However, there are rumblings that the rally could run out of steam, causing jitters on trading floors.

"Some areas of the market appear overheated," Keith Lerner at Truist Advisory Services, said.

"The extended stretch without a meaningful pullback leaves the market more sensitive to negative surprises."

Such worries have been part of the reason behind the rally in gold to a record above $4,000 on Wednesday.

Alexandra Symeonidi, corporate credit analyst at William Blair, wrote: "Given the strong rally in tech stocks some market participants started to question the sustainability of the price momentum and were driving parallels with recent bubbles.

"So, while the overall market has been healthy, investors have been adding hedges in what is broadly considered to be a safe haven asset."

Gold has since pulled back, helped by a breakthrough in Gaza peace talks and a strengthening dollar.

All three main indexes on Wall Street ended in the red, and Asia largely followed suit.

Hong Kong and Tokyo were off around one percent, while Shanghai, Sydney, Singapore, Wellington and Manila were also down.

Seoul, however, rallied more than one percent thanks to a six percent surge in Samsung on optimism about its AI chips and memory business.

Jakarta was also up.

Adding to the unease is the standoff in Washington that is expected to see a US government shutdown run into a third week, with both sides showing no sign of backing down.

Republican Senate Majority Leader John Thune indicated a weekend session was unlikely, according to new website Semafor. The Senate was due to be in session on Friday, with an eighth vote on the House-passed bill tipped to fail.

Donald Trump repeated threats to slash government programmes popular with Democrats as he berated the party over the shutdown at a cabinet meeting.

"The Democrat shutdown is causing pain and suffering for hardworking Americans, including our military, our air traffic controllers and impoverished mothers, people with young children, people that have to live not the greatest of lives," he said.

Democrats are privately preparing a shutdown lasting several more weeks, CNN reported, if Republicans do not agree to their demands to extend health care subsidies due to expire on December 31.

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: DOWN 1.0 percent at 48,087.75 (break)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 26,501.69

Shanghai - Composite: DOWN 0.3 percent at 3,923.11

Euro/dollar: UP at $1.1572 from $1.1558 on Thursday

Pound/dollar: UP at $1.3309 from $1.3294

Dollar/yen: DOWN at 152.90 yen from 153.14 yen

Euro/pound: UP at 86.95 pence from 86.94 pence

West Texas Intermediate: UP 0.1 percent at $61.59 per barrel

Brent North Sea Crude: UP 0.1 percent at $65.27 per barrel

New York - Dow: DOWN 0.5 percent at 46,358.42 (close)

London - FTSE 100: DOWN 0.4 percent at 9,509.40 (close)

(A.Lehmann--BBZ)