A sense of calm has descended on trading floors over the past few days after last week's asset-wide volatility, helped by forecast-busting US jobs figures that eased worries about the world's top economy.
However, growing concern about the hundreds of billions spent on artificial intelligence infrastructure -- and the bundles more announced in the past few days -- have fanned speculation about when, if ever, companies will see a return.
The release of new tools this month that can perform crucial tasks in a range of fields, including legal, sales and marketing, has compounded those jitters -- hammering companies worried about competition.
Analysts said that has seen traders reassign their AI investments, with the main beneficiaries being chipmakers and other firms needed to build infrastructure.
"Developments in AI, particularly around the rollout of various AGI (artificial general intelligence) products, are only vaguely understood, which makes the ability to price future risk and certainty... something of a guess," said Pepperstone's Chris Weston.
Artificial general intelligence is the mooted next stage of AI, when computers could outperform humans across a wide variety of tasks.
Chris Beauchamp, chief market analyst at IG, added that "investors are rotating away from labour-intensive, fee-based business models that could face margin pressure from AI automation".
"This represents a significant shift from earlier AI enthusiasm, which focused primarily on technology enablers rather than potential losers," he said.
"The speed at which these concerns are spreading suggests markets are becoming more sophisticated in their analysis of AI's impact. Rather than a blanket assumption that AI benefits all companies, investors are now making sector-by-sector assessments of winners and losers."
Those concerns have weighed on US tech in recent months, with Apple, Amazon and Facebook parent Meta among those feeling the pinch, while upstream companies -- many based in Asia -- are enjoying healthy gains.
That saw Wall Street retreat on Thursday, with the Nasdaq more than two percent down, while the S&P 500 shed more than one percent. Both indexes are down for the year. The Dow also dropped.
Asia also tumbled red, with Hong Kong, Tokyo, Seoul, Shanghai, Sydney, Singapore, Wellington, Bangkok, Mumbai, Manila and Jakarta all hit.
However, chipmakers were the standout performers, enjoying big gains. Samsung was up more than one percent in Seoul, while Tokyo-listed Advantest and Tokyo Electron enjoyed similar gains. SMIC in Hong Kong was also well up.
London and Frankfurt opened higher but Paris slipped.
Precious metals saw some of the heftiest selling this week, pushing gold below $4,900 an ounce and silver to $74, though the movements were not as wild as those earlier in the month that sent shockwaves through trading floors.
Attention turns to US inflation figures due later on Friday, which come after a bumper jobs report on Wednesday saw traders dial down their expectations for a Federal Reserve rate cut next month.
Most now see the next reduction in July owing to signs the economy is faring a little better than initially feared.
- Key figures at around 0815 GMT -
Tokyo - Nikkei 225: DOWN 1.2 percent at 56,941.97 (close)
Hong Kong - Hang Seng Index: DOWN 1.7 percent at 26,567.12 (close)
Shanghai - Composite: DOWN 1.3 percent at 4,082.07 (close)
London - FTSE 100: UP 0.4 percent at 10,442.92
Euro/dollar: DOWN at $1.1859 from $1.1876 on Thursday
Pound/dollar: DOWN at $1.3614 from $1.3620
Dollar/yen: UP at 153.40 yen from 152.75 yen
Euro/pound: DOWN at 87.10 pence from 87.16 pence
West Texas Intermediate: DOWN 0.1 percent at $62.75 per barrel
Brent North Sea Crude: DOWN 0.1 at $67.47 per barrel
New York - Dow: DOWN 1.3 percent at 49,451.98 (close)
dan/pbt
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