Asia leads tech stock sell-off

**Bisi Adibayo** (0:01)
Too much tech, too fast? It's World Business Express from the BBC World Service. I am Bisi Adibayo. Today we're asking what's behind this week's technology sell-off across the globe, and why India's delayed monsoon is raising concerns over food prices and exports.
It's been a roller coaster week for technology stocks around the world, but it's Asia that's bearing the brunt of the latest sell-off. South Korea's Cuspi and Japan's Nikkei were among the hardest hit, amid growing concerns that the excitement around artificial intelligence may have pushed technology stocks too high. Randip Somel is deputy fund manager at M&G Investments, and he joins me now. Randip, what a week it's been, but why has Asia found itself at the center of this latest tech sell-off? Could it simply be because so much of the AI supply chain is based there?

**Randip Somel** (1:01)
Hi, Bizzy. Yes, it is. If we look at the Cosby today, which is the South Korean index, its two largest holdings from the 1st of January, 2025, have added nearly 3 trillion in value, SK Hynix and Samsung. If we move over to Japan, the largest company by market cap now is called Kyokusa Holdings, also a memory company.
With the continued demand for memory, and it takes a long time to bring on supply, the natural outlet is price, and these companies have seen their margins, their profits and their cash flow rise hugely. I think what we're seeing at the moment is just the investors looking at how strong these companies have been and taking some profits off the table.

**Bisi Adibayo** (1:44)
Apple is also feeling the heat because it's come under pressure after raising prices on Macs and iPads, blaming rising memory chip costs. So does that sort of suggest that the AI boom is becoming more expensive for everyone, including the consumers now?

**Randip Somel** (2:00)
It is indeed.
Apple have never, across the board, without a new product coming out, raised prices the way they have now. So Macs, iPads, home devices are all having about $100 added to them. And this is because getting memory now, given their such high demand from AI-related data centers, is getting more expensive. The Apple share price has fallen 6% on the news of these price hikes. That's the largest fall since President Trump announced the tariffs last April.

**Bisi Adibayo** (2:31)
And let's do one last one about Unilever reportedly considering a bid for supplements maker Thorn.

**Randip Somel** (2:37)
Yes. In the case of Unilever, they're recently fresh off the back of spinning out the Magnum ice cream brands. And at the same time, they've sold their food business to McCormick in the US for 16 billion. So brands like Hellman's, Knorr, Marmite are all gone. So Unilever now has cash to spend and they're looking into the more healthy areas. And in the case of Thorn, it provides dietary supplement pills which have a better growth trajectory going forward than the old school food business.

**Bisi Adibayo** (3:07)
Randeep Samel of MAG Investments, thank you.
Well, let's go to India now where the late arrival of the monsoon and below average rainfall are causing concern for the country's 300 billion dollar agriculture sector with a developing super El Nino also in the mix. And forecasters say that India could be heading for its weakest monsoon in a decade. And that of course is raising fears over food prices and possible export restrictions. The BBC's Archana Shukla is in Mumbai.

**Archana Shukla** (3:36)
The monsoons have arrived almost a month late and the increasing heat waves and the climate change that we are seeing, people are finding it difficult to go to work in different parts of the country where monsoons are yet to arrive. We've seen schools being closed early. We are seeing extreme heat wave conditions in certain northern and central India parts which are becoming very drier.

**Bisi Adibayo** (3:57)
And I presume this would also filter into agriculture, which is worth around $300 billion to India's economy.

**Archana Shukla** (4:04)
The tragedy is, which India has not been able to completely solve, although we have come a long way, is in terms of building our irrigation. Nearly half of our farmland still are being rain fed. This is the season when India grows some of its staples, like rice, sugar cane, soya bean, even cash crops like cotton, which are also very big export produce from India.
And a lot of it is seeing delayed sowing. And if rains don't arrive in July full-fledged, then we are possibly looking at a scenario of a weaker harvest, lower farm incomes, even food prices going up because of this, and maybe some export restrictions as well for India to have its own food security in place.