Asian software stocks declined on Tuesday, mirroring an overnight sell-off in U.S. markets, as concerns over artificial intelligence resurfaced. In Hong Kong, software developer Kingdee International led the decline in the city's technology index, falling nearly 10% during the morning session. AI software firm SenseTime Group dropped approximately 6.5%, while Kingsoft Corporation saw a decline of around 4%.
In Japan, IT service provider NEC Corp. and the Japanese subsidiary of Oracle Corp. both fell roughly 6% by midday. Technology investor SoftBank Group declined about 5%. Australian software shares also moved lower. Accounting software company Xero fell around 3%, enterprise software-as-a-service provider Technology One dropped about 4%, and cloud-based logistics firm WiseTech Global declined approximately 3%.
Movements in the South Korean market were more subdued. Hancom, listed on the Kosdaq, was down 0.6% in late morning trading. The company is known for its Hancom Office suite of word processing, spreadsheet, and presentation applications—similar to Microsoft Office but with strong support for the Korean language.
The declines followed a prior drop in Wall Street stocks on Monday. Investors appeared rattled by a widely circulated report from Citrini Research, which sparked a new wave of AI anxiety by describing a scenario where technological change fuels a race to the bottom in pricing for white-collar knowledge work.
Software firms Datadog, CrowdStrike, and Zscaler each fell more than 9%. American Express, KKR, and Blackstone, which were also highlighted in the Citrini report, similarly experienced declines.
AI-related concerns have previously unsettled markets. In early February, anxiety over massive AI capital expenditure plans by companies contributed to a downturn in Asian technology and software stocks.
Strategists at OCBC Group Research noted that the latest bout of AI anxiety, combined with geopolitical and tariff concerns, has triggered classic risk-off behavior, pushing down global bond yields and lifting gold prices. They added that the release of new AI tools is likely to continue causing volatility in specific technology sub-sectors.
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