BANGKOK (AP) - Asian shares exhibited a mixed performance on Wednesday, with notable movements observed following the recent escalation of tensions in the Middle East. Oil prices surged more than 2% in response to the U.S. launching strikes on Iran after the country allegedly attacked three ships in the vital Strait of Hormuz.
U.S. futures remained relatively unchanged as markets reacted to the news. Early Wednesday, Brent crude, which serves as the international standard, experienced a jump of 2.6% to reach $76.09 per barrel. Meanwhile, the U.S. benchmark crude also gained 2.6%, rising to $72.25 per barrel. These prices reflect a recovery from recent declines that brought them back to pre-war levels with Iran, which began in late February.
In the Asian markets, shares across Greater China experienced an uptick, contrasting with declines seen in other regions. Tokyo's Nikkei 225 index saw a minor loss of 0.3%, closing at 68,077.96, while South Korea's Kospi faced a more significant dip of 2.9%, settling at 7,429.13. The South Korean index had previously surged past the 9,000 mark last month before experiencing heavy sell-offs, particularly in major AI-related tech stocks like Samsung Electronics and SK Hynix. Early trading on Wednesday saw Samsung drop 2.9% following a 7% plunge the previous day, while SK Hynix made gains, rising by 2.4%.
Taiwan's Taiex index saw a slight decrease of 0.2%. In contrast, Hong Kong’s Hang Seng index rose by 2.4% to reach 24,057.24, and the Shanghai Composite index gained 0.5%, closing at 4,011.05. Despite the AI boom benefiting other markets, Chinese investors appear to be shifting their focus towards domestic initiatives aimed at developing the country’s AI capabilities.
The rally in Hong Kong was largely driven by technology shares, with Tencent Holdings climbing 3.1% and Alibaba Group Holding jumping 8.1%. Baidu also enjoyed an increase of 4.7%. However, in other areas of Asia, Australia’s S&P/ASX 200 index fell by 0.7%, mirroring a similar loss seen in India's Sensex, which also dropped by 0.7%.
On the previous day, Tuesday, the volatility surrounding AI stocks impacted Wall Street, leading to a downward trend in major indexes. The S&P 500 index fell by 0.4%, closing at 7,503.85, although the majority of its constituent stocks managed to rise. Nonetheless, the downturn in AI-related stocks heavily influenced the Nasdaq composite, which dropped 1.2% to 25,818.69. The Dow Jones Industrial Average recorded a decrease of 0.2%, closing at 52,925.15, from a previous record high.
Investor sentiment is currently being challenged by concerns that the sky-high valuations of AI-related shares may not be sustainable. Additionally, there are worries that significant investments in computer chips and data centers may not yield the productivity and profit levels needed to justify the expenditures. Advanced Micro Devices and Intel reported substantial losses, with shares sinking by 6.5% and 9.7%, respectively. Micron Technology also faced a decrease, down 4.7%.
Another notable stock movement included SpaceX, which saw a 6.8% drop in its first day of trading after being included in the Nasdaq 100 index. Rivian Automotive faced a staggering decline of 18.1% after announcing plans to sell 75 million shares, a move that diluted existing shareholders' stakes.
In currency trading, the U.S. dollar strengthened, rising to 162.38 Japanese yen from the previous 162.11 yen. The euro remained stable against the dollar, unchanged at $1.1414 as the markets digested recent geopolitical developments and their economic implications.
