Japan’s Nikkei 225 officially entered a bear market on Friday, November 6, 2026, after a 6.2% decline that pushed the index more than 20% below its June peak. The downturn, driven by a global retreat in artificial intelligence-linked technology stocks, triggered widespread volatility across Asian markets and forced a trading halt in South Korea.
Asian markets face contagion from AI sell-off
The regional decline followed a punishing session on Wall Street where the Nasdaq Composite fell 5.5%, leaving the US technology-heavy index more than 10% below its recent high and in correction territory. Anadolu reports that the Nikkei 225’s slide into bear market territory was led by chip-related stocks, including a 12% plunge in Japanese chip-testing equipment maker Advantest.
The Nikkei 225 hit bear market territory on November 6, 2026, following a decline of more than 20% from its record peak of 72,831.73 reached on June 22. The index closed the day down 6.2% at approximately 57,271 points. This abrupt downturn represents a major change in market mood for an industry that had been buoyed by artificial intelligence optimism earlier this year.
South Korea’s Kospi experienced a severe drop of more than 8% during the morning session, which activated circuit breakers to suspend trading for 20 minutes. In early trading, the Kospi dropped 8.55%. Major South Korean semiconductor firms saw heavy losses, with Samsung Electronics down 5.6% and SK Hynix falling 9% according to Anadolu. Electronics component maker LG Innotek declined 6.7%, while display manufacturer LG Display fell 3.6%.
Market sentiment was rattled by the underwhelming guidance provided by Kioxia Holdings, a prominent tech-focused firm, which failed to meet expectations and sparked a series of margin call liquidations. In Japan, memory chipmaker Kioxia Holdings shed 11%, while technology investor SoftBank Group also lost 11%. Semiconductor equipment supplier Tokyo Electron fell nearly 9%.
Other regional movements included:
- Taiwan’s Taiex dropped 4.51% to 39,701.64, with TSMC declining 4.7% and Foxconn Technology losing 4.5% (Anadolu).
- Hong Kong’s Hang Seng slipped 1.02% to 24,543.71 (Anadolu).
- China’s Shanghai Composite fell 1.17% to 3,646.63 and the Shenzhen Component shed 2.4% to 11,196.22 (Anadolu).
- Chinese technology shares faced pressure, with the STAR Market and the ChiNext Artificial Intelligence Index both falling more than 4%.
- Mainland China’s CSI 300 declined 1.47% (CNBC).
- Australia’s S&P/ASX 200 slipped 0.9% (CNBC).
- India’s GIFT Nifty indicated a negative, gap-down start for the market.
US political shifts fuel regulatory fears
Investors are reassessing the sustainability of the AI investment boom amid concerns that the Democratic sweep of the US midterm elections could lead to tighter restrictions on data-center construction.
Tech giants lose massive market value
The sell-off has disproportionately affected the companies driving the AI build-out. On Thursday, the Nasdaq 100 tumbled 6.4% and erased $2.3 trillion in market value, marking its steepest one-day fall since March 2020. The broad-market S&P 500 lost 4.4%, its worst day since the April 2025 tariff meltdown.
The Philadelphia Semiconductor Index sank 12.2%, reflecting sharp losses across US chip stocks. While all 11 sectors of the S&P 500 closed with losses, companies tied to the AI build-out suffered particularly keenly.
On Thursday, the three major Wall Street averages posted their worst one-day performances since April 2025. Futures tied to the Dow Jones Industrial Average slumped 1.3%, while S&P 500 futures were down 0.35%. Nasdaq-100 futures inched 0.3% higher during early Friday trading, attempting to claw back a fraction of the heavy losses from the previous day.
Earlier coverage: Nasdaq Composite Plunges into Correction Territory After Tech Selloff