Asian Stocks Set to Edge Lower After Tech-Led Sell-Off Gains Momentum

Kuala Lumpur, 5 February 2026 – Asian equity benchmarks were positioned to open lower on Thursday as a broader sell-off in global technology stocks weighed on investor sentiment following sharp declines in U.S. markets. Technology-linked weakness, particularly among software and AI-exposed names, is spilling over into regional trading, while risk assets such as Bitcoin have also extended their losses. 

Tech Weakness Spread from Wall Street

The slide in tech shares began in the United States, where heavy losses among software and semiconductor stocks dragged major indexes. Rotation out of high-growth tech sectors has been driven by concerns over how rapid advancements in AI could disrupt existing software business models, as well as disappointing outlooks or forecasts from some tech and chip firms. 

Asia’s markets look set to follow that trend, with futures pointing to lower openings across key markets such as Tokyo, Hong Kong and Sydney as global sentiment remains cautious. A rotation into more economically sensitive and defensive industries has further reduced demand for pure tech exposure. 

Regional Market Dynamics

While tech sector weakness is broad, hardware-oriented technology companies, such as memory chip and foundry providers, have shown relative resilience compared to pure software firms, which have experienced steeper drops on AI-related fears. This divergence reflects Asia’s tech sector composition, which has a heavier weighting toward hardware than some Western markets. 

Elsewhere in the region, certain indices have seen mixed performance, with some markets trimming losses after initial declines, partly supported by gains in commodities and greater risk aversion that favours safe-haven assets. 

Investor Sentiment and Risk Assets

Risk sentiment has been further dampened by extended weakness in cryptocurrencies such as Bitcoin, which has retreated alongside equity markets. Combined with tech equity pressure, this has contributed to a cautious early trading tone in Asia, with traders waiting for clearer direction from earnings and macroeconomic data in the coming sessions.