Software Stocks Fall in Asia After US Tech Selloff: Markets Wrap
(Bloomberg) — Software stocks slid from India to Japan, following declines in their US peers, on concern advances in artificial intelligence will undermine traditional business models.
Shares of Indian information technology bellwether Tata Consultancy Services Ltd. fell 6%, while Infosys Ltd. dropped more than 8%. Australian cloud-based accounting software maker Xero Ltd. tumbled more than 15%, and Japan’s Nomura Research Institute Ltd. slipped 8%.
Elsewhere, oil rose after the US Navy shot down an Iranian drone headed toward an aircraft carrier in the Arabian Sea. The yen weakened as traders positioned before a snap election in Japan this weekend. Gold climbed back above $5,000 an ounce on dip buying. European stock futures edged lower.
The slump in software shares came after AI startup Anthropic released a productivity tool for in-house lawyers, indicating it’s directly competing against software-as-a-service businesses. That led to a slide in stocks associated with legal software and data services, and snowballed to include a broader range of software firms.
The declines in Asian software firms were offset by gains in more traditional businesses such as financials and industrials, which are seen to benefit from a rotation trade away from tech. The MSCI Asia Pacific gauge edged up 0.1%.
“While Asia’s tech sector will see some overall pressure, energy and equipment and chip stocks should fare better than software,” said Matthew Haupt, a fund manager at Wilson Asset Management in Sydney. “Hong Kong and China will be under more pressure given their higher exposure to software names compared to markets like South Korea.”
The selloff in US software stocks spread to alternative investment firms such as Blue Owl Capital Inc. on bets that AI-driven disruptions will cause steep losses on their books. Wall Street has been skeptical about the software industry for a while, but sentiment has worsened due to fears about the potential impact of AI.
A growing number of investors are also starting to wager that the long rally in tech companies, led by the “Magnificent Seven” megacaps, is giving way to broader market participation. A marked rotation has taken place in 2026, with value shares far outpacing growth.
Elsewhere in Asia, Chinese solar stocks climbed following local media reports that teams from SpaceX and Tesla Inc. had visited local companies. The SpaceX team signed an order with a leading domestic solar cell equipment maker, according to a report by Cailian, citing supply chain sources.
Oil advanced for a second day as geopolitical tensions resurfaced following the US downing of an Iranian drone in the Arabian Sea. Brent advanced to around $68 a barrel, after adding 1.6% on Tuesday.
“The drone and tanker skirmishes are highlighting to the market how volatile the situation is, and how things could escalate out of hand even unintentionally,” said Saul Kavonic, senior energy analyst at MST Marquee in Sydney.
The yen fell as traders positioned ahead of an expected victory by Prime Minister Sanae Takaichi’s Liberal Democratic Party in this weekend’s election.
“A strong showing by the LDP will embolden Takaichi to advance her budget stimulus plans, raising the risk of a larger government debt burden and weighing on Japanese government bonds and the yen,” Carol Kong, a strategist at Commonwealth Bank of Australia, wrote in a note to clients.
Gold rose for a second day as dip buyers snapped up precious metals following their collapse from record highs, while geopolitical tensions in the Arabian Sea provided further support for the haven asset.
Bitcoin gained in Asia after dropping to a more-than one-year low in US trading. The coin’s recent plunge may deepen into a self-reinforcing “death spiral,” inflicting lasting damage on companies that have spent the past year stockpiling the token, investor Michael Burry said.
Corporate Highlights:
Nintendo Co.’s shares slid their most in 18 months after the company reported disappointing earnings, revealing a big hit to margins while concerns grow about the impact of soaring memory chip prices in 2026. Super Micro Computer Inc. shares gained in late US trading after the company gave a forecast for sales in the current quarter that signaled strong demand for its gear to run AI data centers. Nvidia Corp. is nearing a deal to invest $20 billion in OpenAI as part of its latest funding round, according to people familiar with the matter, marking the chipmaker’s single biggest investment in the ChatGPT developer. Banco Santander SA agreed to acquire Webster Financial Corp. in a $12 billion deal that will allow Spain’s largest bank to bet big on the US. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 6:46 a.m. London time Nasdaq 100 futures rose 0.1% Futures on the Dow Jones Industrial Average rose 0.2% The MSCI Asia Pacific Index rose 0.1% The MSCI Emerging Markets Index was little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.1% to $1.1832 The Japanese yen fell 0.4% to 156.34 per dollar The offshore yuan was little changed at 6.9331 per dollar The British pound rose 0.2% to $1.3719 Cryptocurrencies
Bitcoin rose 0.7% to $76,659.96 Ether fell 0.2% to $2,278.51 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.28% Germany’s 10-year yield advanced two basis points to 2.89% Britain’s 10-year yield advanced one basis point to 4.52% Commodities
Brent crude rose 0.6% to $67.71 a barrel Spot gold rose 2.5% to $5,069.24 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sara Hemrajani.
©2026 Bloomberg L.P.
