Asian equities were mixed Friday as tech firms managed to claw back some early losses on bargain-buying at the end of tough week for the sector, while traditional safe havens benefited from a generally cautious mood.
Since AI-linked companies hit record highs in June, their equity prices have been pummeled by concerns they were overvalued, their huge outlays on infrastructure and hardware might not return a profit and, more recently, their servicing costs were spiraling.
That has combined with an Iran war-fueled surge in oil prices to more than $100 that has ramped up inflation, forced central banks to hike interest rates and sent government borrowing costs to multi-decade highs.
Strong earnings in past quarters have been able to temper many of the concerns, but analysts pointed out that investors are demanding better and better results to justify their backing.
Earnings from Facebook-parent Meta and chip equipment maker Lam Research this week have beaten forecasts but seen their shares dive.
"Even positive news is being ignored," said FOREX.com's Fawad Razaqzada.
"Strong results are no longer enough if the outlook fails to match an already demanding valuation. Investors are becoming much less forgiving."
The rush out of tech has, however, boosted industrial companies overlooked for much of the AI boom, with the Dow rising this week while the Nasdaq and S&P 500 retreated.
The general losses in New York filtered through to Asia in the morning, but some markets staged a comeback as the day progressed.
Seoul -- which was at the forefront of the AI boom and has led recent losses -- shed more than two percent after the open but was up at the close.
Chipmaker and market heavyweight SK hynix -- a major target amid the waves of buying and selling -- ended up more than four percent. However, its US shares fell more than eight percent Thursday after it said it was scrapping plans for an initial public offering for its US subsidiary Solidigm, citing "market conditions and share price trends".
There were also gains in Hong Kong, Shanghai, Sydney, Singapore and Jakarta.
Tokyo's Nikkei 225, which is also heavily weighted to tech, ended in the red, though well off earlier lows. Wellington, Mumbai and Manila were also down. Taipei was closed as Typhoon Champi neared Taiwan.
London, Frankfurt and Paris dropped in the morning.
Safe havens benefited, with the yen rallying against the dollar, helped by strong Japanese inflation data that boosted bets on another interest rate hike.
The currency has struggled against the greenback in recent years owing to the wide interest rate gap between the United States and Japan, as well as worries about the Asian giant's fiscal situation.
US Treasuries were also in demand, with yields falling from two-decade highs.
"Markets are looking for safe havens as the now familiar fears over AI and the tech sector, alongside ever higher oil and energy prices are powering a move back into bonds," said National Australia Bank's Gavin Friend.
"Regardless of the continued climb in oil prices, investors are increasingly looking for safe havens with the recent pullback in US Treasury yields getting a sizeable push," he said, adding that two- and 10-year Treasury yields were at one-month lows.
And Carol Kong at Commonwealth Bank of Australia said the yen could benefit further if the tech trade continued to deteriorate.
Oil prices added to the dour mood on fresh Middle East worries. Brent extended Thursday's spike and headed back towards $115 a barrel for the first time since May, while WTI topped $100.
The latest rally came after Iran threatened to hit US bases in the region if its military continued to escort ships through the Strait of Hormuz.
