Japan’s Nikkei plunges 5.7%, South Korea’s Kospi falls 7.4% amid AI stock rout

Japan's Nikkei fell 5.7% and South Korea's Kospi dropped 7.4% in a sharp sell-off concentrated in artificial intelligence-linked equities, according to the headline. The transmission mechanism appears to run through risk appetite and sector-specific repricing, as the heavy index weights of semiconductor and AI-supply-chain names in both markets amplify declines when investor enthusiasm for the theme reverses. Kospi's steeper fall reflects its greater concentration in memory chipmakers and hardware exporters, which are most directly tied to AI capital expenditure cycles, while the Nikkei's broader industrial base provided partial cushioning. Traders will be watching the next overnight move in U.S. technology shares and Nvidia-linked semiconductor names, since a continued slide there would signal whether the regional sell-off reflects a durable reassessment of AI demand or a temporary positioning unwind.

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