A blockbuster earnings report from chip bellwether Nvidia on Wednesday seemed to settle nerves that vast investments in the artificial intelligence sector may have been overdone.
But the euphoria was short-lived as warnings grow that the tech-led rally across equities -- which has seen several markets hit records and companies clock eye-watering capitalisations -- may have run its course, and a correction could be in hand.
In unveiling Nvidia's forecast-topping report, boss Jensen Huang dismissed fears of a bubble that has caused global equities to wobble.
"From our vantage point, we see something very different," he said.
After his firm sparked an Asia rally on Thursday, Wall Street began on a strong note, but later went into sharp reverse, with selling compounded by worries over the US labour market.
Data showed that while more jobs were created in September, the unemployment rate crept higher.
The reading did little to alter investors' belief that the US Federal Reserve will stand pat on borrowing costs when it meets next month, with officials more focused on stubbornly high inflation.
Expectations had been recently dampened by hawkish comments from decision-makers, including Fed boss Jerome Powell.
Tracking New York, Asian markets were a sea of red, with tech giants leading the way.
Seoul-listed Samsung Electronics sank 5.8 percent and rival SK hynix 8.8 percent -- the firms are two of the world's leading memory chip makers.
Taiwanese chip titan TSMC tanked 4.8 percent, while Japanese investment giant SoftBank plunged more than 10 percent.
That led broader markets lower.
Tokyo, Hong Kong and Shanghai each lost more than two percent, while Taipei and Seoul were off more than three percent. Sydney, Singapore, Wellington, Mumbai and Bangkok also saw steep losses.
London, Paris and Frankfurt all fell sharply at the open.
The rush from risk assets also saw bitcoin fall to as low as $81,629 for the first time since April, extending a sell-off suffered since its record high above $126,200 last month.
"The price action across markets has been prolific, and we've seen some truly impressive reversals in risk assets," said Chris Weston at Pepperstone.
"Sentiment in so many markets remains highly challenged, and we've seen new evidence that managers are dumping their 2025 winners -- raising expectations that the path of least resistance is for risk to trade lower in the near-term.
"The market seems far more sensitive and ready to de-risk on emerging news, almost seeking reasons to take positioning down when that news could easily be seen as a positive in a more bullish set-up."
The yen held earlier gains after Japanese Prime Minister Sanae Takaichi said her cabinet had approved a major $135 billion stimulus package aimed at easing the pain of inflation on households and firms.
However, there are worries that the spending plan will add to Japan's already colossal debt and has pushed government bond yields to record highs, fanning concerns about the country's fiscal state.
The Japanese currency has fallen this week to its lowest level against the dollar since January, though it got a little support from data in the morning showing core inflation ticked up last month, giving the Bank of Japan some room to hike interest rates.
The yen's weakness has also raised the chances of authorities stepping in to support the unit, with Finance Minister Satsuki Katayama saying on Friday officials may intervene and take "appropriate action against disorderly (foreign exchange) moves".
Seoul-listed The Pinkfong Company, the creator of the "Baby Shark" YouTube video, tanked more than 11 percent, with the value now below its IPO price, having made its market debut on Tuesday.
- Key figures at around 0815 GMT -
Tokyo - Nikkei 225: DOWN 2.4 percent at 48,625.88 (close)
Hong Kong - Hang Seng Index: DOWN 2.4 percent at 25,220.02 (close)
Shanghai - Composite: DOWN 2.5 percent at 3,834.89 (close)
London - FTSE 100: DOWN 1.0 percent at 9,433.32
Dollar/yen: DOWN at 156.75 yen from 157.55 yen on Thursday
Euro/dollar: UP at $1.1539 from $1.1525
Pound/dollar: UP at $1.3076 from $1.3070
Euro/pound: UP at 88.24 from 88.18 pence
West Texas Intermediate: DOWN 1.9 percent at $57.89 per barrel
Brent North Sea Crude: DOWN 1.7 percent at $62.31 per barrel
New York - Dow: DOWN 0.8 percent at 45,752.26 (close)
dan/dhw
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