San Francisco Frontiers - Asian stocks track Wall St down but AI shift tempers losses

After last week's asset-wide volatility, a sense of calm has descended on trading floors over the past few days, helped by forecast-busting US jobs figures that eased worries about the world's top economy.

However, growing concern about the hundreds of billions spent on artificial intelligence infrastructure -- and the bundles more announced in the past few days -- have fanned speculation about when, if ever, companies will see a return.

That has been compounded this month by the release of new tools that can perform crucial tasks in a range of fields, including legal, sales and marketing, hammering companies worried about competition.

Analysts said that has seen traders reassign investments within the AI area, with the main beneficiaries being chipmakers and other firms needed to build infrastructure.

"Developments in AI, particularly around the rollout of various AGI products, are only vaguely understood, which makes the ability to price future risk and certainty... something of a guess," said Pepperstone's Chris Weston, referring to artificial general intelligence, the mooted next stage of AI when computers could outperform humans across a wide variety of tasks.

And Chris Beauchamp, chief market analyst at IG, added that "investors are rotating away from labour-intensive, fee-based business models that could face margin pressure from AI automation".

"This represents a significant shift from earlier AI enthusiasm, which focused primarily on technology enablers rather than potential losers," he added.

"The speed at which these concerns are spreading suggests markets are becoming more sophisticated in their analysis of AI's impact. Rather than a blanket assumption that AI benefits all companies, investors are now making sector-by-sector assessments of winners and losers."

Those concerns have weighed on US tech in recent months, with Apple, Amazon and Facebook parent Meta among those feeling the pinch, while upstream companies -- many based in Asia -- are enjoying healthy gains.

That saw Wall Street retreat Thursday, with the Nasdaq more than two percent down, while the S&P 500 shed more than one percent. Both indexes are down for the year so far. The Dow also dropped.

Asia was also largely in the red, though the losses were less pronounced, while Seoul -- which has led global markets this year -- was up thanks to advances in heavyweight Samsung Electronics and rival SK hynix.

Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Wellington, Manila and Jakarta were also down after a broadly healthy week.

Precious metals saw some of the heftiest selling this week pushing gold below $4,900 an ounce and silver to $74, though the movements were not as wild as those earlier in the month that sent shockwaves through trading floors.

Attention turns to US inflation figures due later Friday, which come after a bumper jobs report Wednesday saw traders dial down their expectations for a Federal Reserve rate cut next month.

Most now see the next reduction in July owing to signs the economy is faring a little better than initially feared.

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: DOWN 0.7 percent at 57,226.59 (break)

Hong Kong - Hang Seng Index: DOWN 1.5 percent at 26,637.78

Shanghai - Composite: DOWN 0.3 percent at 4,120.72

Euro/dollar: DOWN at $1.1870 from $1.1876 on Thursday

Pound/dollar: DOWN at $1.3618 from $1.3620

Dollar/yen: UP at 153.11 yen from 152.75 yen

Euro/pound: UP at 87.17 pence from 87.16 pence

West Texas Intermediate: FLAT at $62.85 per barrel

Brent North Sea Crude: FLAT at $67.54 per barrel

New York - Dow: DOWN 1.3 percent at 49,451.98 (close)

London - FTSE 100: DOWN 0.7 percent at 10,402.44 (close)

M.Hill--SFF