Asian Markets Mixed as AI Share Downturn Impacts Japan and South Korea

Asian markets showed mixed performance on Monday. Selling of shares linked to artificial intelligence led to declines in benchmarks in Japan and South Korea. However, gains in other stocks helped offset those losses.

U.S. futures advanced, while oil prices rose but stayed near early 2023 levels, before the Iran conflict started in late February. Tensions between the U.S. and Iran grew over the weekend. Iran launched drone and missile attacks on Bahrain and Kuwait in response to new U.S. airstrikes, heightening global economic uncertainties.

Japan and South Korea Market Movements

Tokyo’s Nikkei 225 fell 1% to 68,704.70, following a 4.2% drop on Friday. SoftBank Group, an investor in OpenAI, dropped 5.9% after a 12.5% decline on Friday. South Korea’s Kospi decreased by 2% to 8,246.50, following a 5.8% fall on Friday. Samsung Electronics dropped by 6%, and memory chipmaker SK Hynix fell 4.5%.

Taiwan’s Taiex index, benefiting from many tech companies like TSMC, gained 1.1%, recovering some losses from a 3.6% decline on Friday.

Other Regional Market Performance

Hong Kong’s Hang Seng rose 2.1% to 23,153.89, while the Shanghai Composite index increased by 0.2% to 4,034.08. Australia’s S&P/ASX 200 rose by 0.4% to 8,798.00, and India’s Sensex remained nearly unchanged.

U.S. Stock Market Trend

On Friday, Wall Street experienced worries over AI, with mixed results. The S&P 500 edged down less than 0.1% to 7,354.02, and the Nasdaq composite, focused on technology, dropped 0.2% to 25,297.62. The Dow Jones Industrial Average fell 0.1% to 51,876.11. Tech stocks like Micron Technology, Intel, Nvidia, and Advanced Micro Devices (AMD) recorded declines.

Oil and Currency Market Update

There’s still plenty of risk facing the oil market with U.S.-Iran tensions re-escalating, said Warren Patterson and Ewa Manthey, ING commodities strategists, in a commentary. The safety of ships in the Strait of Hormuz is in question after recent vessel attacks. Oil traders have been overly optimistic regarding the recovery timeline for Persian Gulf supplies, according to the strategists.

Brent crude rose 0.7% to $73.27 per barrel, compared to approximately $72 before the conflict. Benchmark U.S. crude increased by 0.8% to $70.02 per barrel.

The U.S. dollar saw a slight rise to 161.81 Japanese yen from 161.71 yen. The euro remained unchanged at $1.1386.