Asian markets retreated on Thursday as investors rotated out of technology stocks amid mounting concerns over the escalating cost of artificial intelligence investment.

At the same time, precious metals markets were rocked by another sharp decline in silver prices, while geopolitical and macroeconomic developments, including renewed US-China engagement and continued weakness in bitcoin, added to fragile global market sentiment.

Asian equities weakened sharply as investors reassessed valuations across technology companies following rising capital expenditure plans linked to artificial intelligence.

Google parent Alphabet reported solid results but projected capital expenditure of $175 billion to $185 billion this year, significantly above analysts’ expectations.

The announcement triggered volatile trading in Alphabet shares, which fell more than 6% at one point before closing 2.16% lower.

Market participants have increasingly rotated out of technology giants and into defensive sectors such as Walmart amid concerns that AI advancements could disrupt employment and corporate earnings.

The recent selloff, fueled partly by the launch of a new legal tool from Anthropic’s Claude large language model, has erased approximately $830 billion in market value since January 28.

Disappointing results from Advanced Micro Devices also weighed on sentiment, with the chipmaker’s shares plunging 17% in the previous session.

Regionally, MSCI’s broad Asia-Pacific index excluding Japan fell 1.84%, dragged by a 3.5% drop in South Korea’s KOSPI.

Taiwanese shares declined 1.5, although the financial and real estate sectors showed resilience.

Japan’s Nikkei slid 1%, while healthcare, real estate, and utilities stocks posted gains.

India’s Nifty 50 was down 0.52% while China’s CSI 300 was down 0.94%.

Precious metals also experienced heavy selling pressure, led by another steep decline in silver prices.

Spot silver dropped as much as 16% and was last down 15% at $75.11 per ounce, while futures in New York fell more than 11%.

The metal had surged nearly 146% during 2025 before collapsing nearly 30% last week.

Analysts attributed the volatility to speculative flows and leveraged positioning rather than physical demand.

Goldman Sachs said, “As prices fell, dealer hedging flipped from buying into strength to selling into weakness, investor stop-outs were triggered, and losses cascaded through the system.”

Gold prices also retreated, slipping more than 2.6% to around $4,834 per ounce.

Goldman noted that tighter liquidity conditions in London markets amplified silver’s correction, while Western investor flows were seen as a primary driver of recent volatility.

Geopolitical developments also captured investor attention following US President Donald Trump’s call with Chinese President Xi Jinping.

Trump described the discussion as “an excellent” conversation and emphasized strong commercial ties between the two countries, including China’s purchase of American agricultural goods and energy products.

Beijing’s statement, however, emphasized Taiwan as “the most important issue” in bilateral relations and urged the US to “handle the issue of arms sales to Taiwan with prudence.”

Analysts suggested the call reflected a pragmatic approach to economic relations.

Negotiations could include a potential agreement covering up to 500 Boeing aircraft during Trump’s expected visit to Beijing in April.

Analysts also suggested the US may consider removing remaining fentanyl-related tariffs as part of broader negotiations.

Bitcoin also remained under pressure, falling to around $70,000 as on-chain data indicated deepening structural weakness.

CryptoQuant’s weekly report showed its Bull Score Index falling to zero, suggesting shrinking buyer participation and tightening liquidity.

Glassnode data highlighted weak spot trading volumes and reduced market demand.

Institutional flows have reversed sharply, with US spot bitcoin exchange-traded funds shifting from net accumulators last year to net sellers, creating a significant demand gap.

Stablecoin growth has also stalled, with USDT market capitalization turning negative for the first time since 2023.

Bitcoin continues to trade below its 365-day moving average, with major support seen between $70,000 and $60,000.

Prediction markets suggest investors expect no immediate Federal Reserve policy shift, limiting liquidity relief.

Trading firm QCP Capital noted, “Crypto remains volatile.”

The firm added, “In macro, the shutdown overhang has faded, but the key takeaway is how quickly fiscal standoffs can return.

Homeland Security funding was only extended through Feb. 13, keeping another deadline risk in play.”

Market participants remain cautious, with analysts pointing to bitcoin’s 200-week exponential moving average near $68,000 as a potential support level amid rising liquidation volumes exceeding $800 million.

The post Morning brief: Asian stocks slump as AI capex fears grow, silver plunges appeared first on Invezz

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