HONG KONG - Asian markets slid on July 25 after a tech-fuelled sell-off overnight on Wall Street as disappointing earnings caused traders to panic that a months-long rally in the sector may have been overdone.

Tokyo’s Nikkei led the retreat in equities, with a stronger yen adding to the downward pressure on exporters, while technology giants across the region were deep in the red.

Global stocks have pushed ever higher this year - with New York’s three main indexes hitting multiple records - with tech titans such as Alphabet and chip makers such as Nvidia and TSMC boosted by an explosion of interest in all things linked to artificial intelligence (AI).

The rallies have been helped by blockbuster profits and upbeat outlooks, causing investors to pile more cash in owing to a fear of missing out.

However, with valuations pushing to dizzying heights, analysts have been warning about retreat, and the latest earnings out on July 23 from Tesla and Google-parent Alphabet provided a selling opportunity.

Tesla said profits fell 45 per cent in the second quarter owing to price cuts and aggressive AI investment and while Alphabet beat forecasts, results from YouTube were less upbeat.

The two firms are part of the so-called “Magnificent Seven” tech kings who have been key to the driving gains in markets this year. Tesla shed 12.3 per cent and Alphabet gave up 5 per cent on July 24.

All three main indexes on Wall Street tumbled, with the Nasdaq shedding 3.6 per cent and the S&P 500 down 2.3 per cent in its worst day since December 2022.

“Investors are now facing the pressing question: How long will it take for these massive investments by hyperscalers to start delivering over-the-top results?” asked analyst Stephen Innes.

“Patience is becoming the new flag-bearer for recent tech stockholders as they wait for these tech bets to pay off,” he added in his Dark Side Of The Boom newsletter.

Asia followed suit, with tech firms among the big losers - South Korean chipmaker SK Hynix dived more than 8 per cent at one point despite strong earnings, while in Japan’s Sony was off more than 4 per cent and tech investor SoftBank more than 7 per cent.

Hong Kong and Shanghai fell even after a surprise cut in a key rate by the Chinese ce...