Technology stocks on Bursa Malaysia fell sharply on Friday, tracking an overnight rout in US tech shares amid worries about the outlook for artificial intelligence (AI) spending.
The Bursa Malaysia Technology Index fell as much as 6.4% during the day, making it the worst-performing sectoral index, before paring its losses to close 4.6% lower at 67.88 points.
Investors were worried that the outcome of this week’s US midterm elections could lead to closer regulatory scrutiny of AI and slow the build-out of data centres. Concerns over returns on heavy spending on AI infrastructure were already weighing on the sector.
On Wall Street overnight, the Nasdaq fell 5.5%, wiping out about US$2.5 trillion in market value in a record one-day loss for the tech-heavy index, while the Dow Jones Industrial Average fell 3.4%.
Among the biggest decliners on Bursa, automation equipment maker Pentamaster Corp closed 5.1% lower at RM4.89, Inari Amertron fell 6.6% to RM2.13 and Malaysian Pacific Industries closed 7.1% lower at RM36.14. ViTrox Corp fell as much as 72 sen to RM9.88 before closing at RM10.22, a day after reporting its best quarterly profit since listing in 2005, while Frontken Corp ended 3.1% lower at RM4.71.
Analysts said the drop appeared to be driven largely by sentiment and valuations rather than a structural collapse in demand for AI, though near-term volatility and delays in project deployment remained key risks.