Asian markets crash: Nikkei 225 tumbles 7%, KOSPI plummets 8.7% amid AI sell-off cues; what’s impacting global markets?

All of these cues combined dragged down the overall sentiment of investors in Asia, at a time when fears over a potential US Congress crackdown on AI and tech spending loom over foreign investors who are steering clear of the sector in search of low-risk bets.

Data showed that the Nikkei 225 crashed 7% to hit an intraday low of 56,745.81 points on Friday’s market due to the consistent selling momentum from investors, in comparison to 61,077.90 points at the previous equity market close.

As of 11:18 am (JST), Nikkei 225 recovered some of its intraday losses, trading 5.7% lower at 57,579 points on November 6, in comparison to the previous market close levels.

This week, the sentiment for Japan was further dented by the Purchasing Managers' Index (PMI) data, which showed that manufacturing activity eased to 53.3 in October 2026 from 54.1 in September this year.

KOSPI tumbled 8.7% to hit an intraday low of 4,911.28 points during the morning trading session on Friday, in comparison to 5,383.80 points at the previous stock market close, according to the exchange data.

After the index crashed to its intraday low in the early hours, KOSPI recovered some of its losses trading 5% lower at 5,114.42 points as of 11:18 am (KST).

Other major indices like the Shanghai Composite were down 1.1%, trading at 3,649.47 points; Singapore’s FTSE was down 2.3%, trading at 5,171.30 points; and Hang Seng was trading 0.60% lower at 24,649 points on November 6.

What’s impacting global markets today?

Data showed that global energy prices surged more than 5% on Thursday to hit a high of $99.62 per bbl during the evening session, with commodity market investors focusing on Trump’s latest threat to “destroy” Iran amid the tanker attacks at the Strait of Hormuz.

Crude oil benchmark Brent crude prices were trading 1.35% higher at $99.63 per bbl as of the morning hours on Friday, in comparison to $99.21 per bbl at the previous market close, according to Investing.com data.

Oil prices started witnessing a sharp rebound after three tankers were attacked at the Strait of Hormuz, as local media reports claimed that it was after the vessels were allegedly trying to pass the key maritime pathway using an “unauthorised route.”

The West Asia uncertainty further increased after US President Donald Trump on Thursday said that America may have to “destroy” the rest of Iran and rebuild it in the next 25 years, citing that the people will know “soon enough” if that happens.

This comes at a time when global investors are already cautious and fearing further crackdown on AI spending and the tech sector in the United States as the Democrats take control of the majority of the US Congress after a landmark win in the midterm elections.

This fear was driving the AI and tech stock sell-off sentiment in the equity markets, with foreign investors turning away from tech and AI stocks in developed markets, including Asia, powering the massive volatility.

Combined with the elevated cost of raw materials in the market amid the West Asia conflict, the further indication of esclations in the region will dent the outlook for both oil and equities in the upcoming period.