Seoul: Oil prices fell and most Asian stocks traded lower on Thursday as investors moved away from major chipmakers, with South Korea’s benchmark Kospi extending its significant losses.
According to United News of Bangladesh, volatility in the oil markets was fueled by the United States’ announcement of a ‘heavy wave’ of strikes against Iran, following an attack on a US military base. Despite this, US stock futures saw a slight rise after Wall Street experienced a downturn on Wednesday.
South Korea’s Kospi index faced intense pressure, dropping 1.3% to 5,587.82, after declining 10.8% on Tuesday and nearly 6% on Wednesday. The index has seen a fall of more than 35% from its record high in June, despite being approximately 30% up for the year. Analysts attribute the recent sell-off to concerns over the substantial investments technology companies are making to expand artificial intelligence capacities, which had previously driven a rally in the market.
Samsung Electronics saw a 2.4% increase after reporting a record operating profit for the latest quarter, aligning with market expectations. However, chipmaker SK Hynix experienced a 4% decline, following a previous 9% drop, as its record quarterly operating profit fell short of analysts’ predictions, prompting a sell-off.
In Japan, the Nikkei 225 rose 0.6% to 61,778.02. Notably, SoftBank Group, an investor in OpenAI, fell 2.7%, whereas Tokyo Electron, a producer of chip-making equipment, climbed 4.4%. Memory chip producer Kioxia Holdings saw a significant gain of 7.5%.
Taiwan’s Taiex, a significant benefactor of the AI boom, rose 0.8%, with leading chipmaker TSMC increasing by 1.8%. Meanwhile, Hong Kong’s Hang Seng index slipped slightly by less than 0.1% to 25,779.70, and the Shanghai Composite decreased by 1.2% to 3,784.55. Australia’s S and P/ASX 200 saw a decline of 0.9% to 8,959.90, while India’s Sensex edged up by less than 0.1%.
On the oil front, prices remained volatile, with Brent crude decreasing by 1% to $87.18 a barrel, and US benchmark crude down by 0.9% to $83.74 a barrel. The geopolitical tensions following US President Donald Trump’s statement on hitting Iran ‘very hard’ after an Iranian attack on a US base in Jordan contributed to these fluctuations.
US stock markets closed lower, with the S and P 500, Dow Jones Industrial Average, and Nasdaq composite all experiencing declines. Chipmakers such as Nvidia, Advanced Micro Devices, and Broadcom also saw losses. The Federal Reserve’s decision to keep interest rates unchanged added pressure, with Chairman Kevin Warsh emphasizing a commitment to reducing inflation while offering limited guidance on future rate moves. This lack of clarity could lead to increased market volatility amid ongoing uncertainty regarding interest rates.
The bond market saw the 10-year US Treasury note yield rise to 4.70%, while currency trading showed a slight increase in the US dollar against the Japanese yen and a decrease in the euro against the US dollar.