While the extreme volatility that greeted the start of the week has calmed, traders remained on edge over the impact of artificial intelligence on companies' bottom lines, while precious metals again took a drubbing.

The latest development to spook markets was news that AI startup Anthropic -- which created the Claude chatbot -- had unveiled a tool that could be used by firms to carry out legal work.

Tuesday's announcement hit firms in the software, financial services and asset management industries, though analysts said there has been a general shift by investors out of tech following years of eye-watering gains, and into other industries.

An underwhelming response to earnings from titans including Alphabet, ARM and Microsoft has aided that move, which also comes as questions are raised about the wisdom of pumping hundreds of billions into AI with little idea about the timing of returns.

"The rout reflects growing unease about how quickly AI could disrupt existing business models and whether incumbent software companies can defend their margins," wrote Chris Beauchamp, chief market analyst at IG.

"Investors are pricing in the risk that new AI-native competitors could undercut pricing and erode market share across the sector."

Fiona Cincotta at City Index said: "Investors rotating into more cyclical names as fears over AI-driven disruption weighed on the market."

And she warned that "while losses in tech continue, sentiment remains fragile".

The rotation was evident in New York, where the tech-heavy Nasdaq shed 1.5 percent while the Dow Jones Industrial Average gained 0.5 percent.

The selling extended into Asia, where Seoul -- which has cruised more than 20 percent to multiple record highs this year thanks to its strong tech presence -- sank more than two percent.

Tokyo, Hong Kong, Shanghai, Sydney, Singapore and Taipei were also down.

- Silver prices tank -

"Enthusiasm towards AI has notably waned in recent months, with the market becoming increasingly bifurcated, not only amid concern over how capital expenditures will be financed (with debt-laden firms such as Oracle taking a battering), but also as concerns mount over concentration," said Pepperstone's Michael Brown.

Silver tanked more than 18 percent as a sell-off in precious metals resumed after a brief spell of calm following the breakneck losses suffered around the weekend when a surge in the greenback made dollar-priced assets more expensive. Gold shed more than five percent.

Both commodities have seen wicked swings over the past week, having earlier hit record highs on a softer dollar, geopolitical concerns, central bank buying and speculation about the independence of the Federal Reserve.

Oil prices fell more than two percent at one point after Iran and the United States said nuclear talks would go ahead in Oman this week.

The news soothed investor concerns sparked by a report earlier Wednesday that the bitter foes would not meet owing to a row about the format and the venue, which sent the price of both main contracts up more than three percent.

Bitcoin briefly fell to $70,010 -- its lowest since November 2024 -- after being caught up in the rollercoaster ride earlier this week as investors reconsidered their risk asset holdings.

The cryptocurrency is now down more than 40 percent from its record high above $126,000 touched in October, and Bloomberg said traders are now betting on it falling below $65,000.

Japanese electronics giant Panasonic soared as much as 15 percent in Tokyo at one point after it said it would increase its job cuts to 12,000 as part of a restructuring drive, while also reporting forecast-topping quarterly operating profit. The firm later pared gains to end up 8.4 percent.

And Sony rallied nearly six percent after announcing it had hiked its full-year sales and profit forecasts thanks to a weaker yen. It also pulled back to finished slightly higher.

- Key figures at around 0700 GMT -

Tokyo - Nikkei 225: DOWN 0.9 percent at 53,818.04 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 26,812.30

Shanghai - Composite: DOWN 0.6 percent at 4,075.92 (close)

Euro/dollar: DOWN at $1.1788 from $1.1802 on Wednesday

Pound/dollar: DOWN at $1.3615 from $1.3648

Dollar/yen: UP at 156.98 yen from 156.92 yen

Euro/pound: UP at 86.59 pence from 86.47 pence

West Texas Intermediate: DOWN 1.9 percent at $63.93 per barrel

Brent North Sea Crude: DOWN 1.8 percent at $68.19 per barrel

New York - Dow: UP 0.5 percent at 49,501.30 (close)

London - FTSE 100: UP 0.9 percent at 10,402.34 (close)

dan/ceg

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