Mumbai, Oct. 15 -- Japan's Nikkei 225 Index plunged 4.9% to close at 64,426 on Thursday, marking its biggest one-day fall since March. The decline was driven by heavy selling in technology stocks as investors grew concerned about whether massive investments in artificial intelligence (AI) can deliver the expected returns.

Concerns also increased over the impact of persistent energy-driven inflation, which could force policymakers to raise borrowing costs. Higher interest rates can increase financing costs for companies and put pressure on stock valuations, particularly in the technology sector.

Japanese companies have significant exposure to the global AI infrastructure boom, making them vulnerable to a sharp correction in highly valued...