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The Associated Press reported that Asian shares were mostly lower in cautious trading Tuesday after artificial-intelligence related stocks bounced back on Wall Street while other sectors continued to be shaky and oil prices stayed high. Japan’s benchmark Nikkei 225 declined 0.6 percent in early trading to 64,512.35. Australia’s S&P/ASX 200 lost 0.8 percent to 8,772.10 while South Korea’s Kospi dropped 2.8 percent to 5,605.31. Hong Kong’s Hang Seng fell nearly 1.0 percent to 23,947.37 and the Shanghai Composite was little changed at 3,732.29.
According to the same report the S&P 500 rose 0.4 percent coming off its worst week since June and the Nasdaq composite rallied 1.1 percent. The majority of U.S. stocks outside of AI and tech fell though and the Dow Jones Industrial Average finished with a 0.1 percent drop. Nvidia added 1.4 percent Monday and was one of the strongest forces lifting the S&P 500. Because it is the largest stock on Wall Street by total market value a 1 percent move for its stock has more effect on the index than any other the report noted. SpaceX which controls the xAI business rose 1.3 percent.
A Reuters dispatch indicated that Asian stocks retreated broadly on Tuesday while oil rose as geopolitical risks rattled sentiment ahead of key results from AI bellwether companies. Investors are bracing for earnings including from Meta Platforms on Wednesday and later in the week from Tesla Lam Research and Texas Instruments the news agency reported. Results from SpaceX are also due on Tuesday according to Reuters. The MSCI Asia ex-Japan index fell 0.93 percent while Japan’s Nikkei 225 dropped 1.28 percent and South Korea’s Kospi tumbled 3.61 percent Reuters figures show.
A Morningstar report found that U.S. semiconductor and AI-related stocks staged a rebound on Monday pushing the S&P 500 and Nasdaq higher after last week’s sharp pullback. However AI infrastructure stocks in Asia did not follow suit with South Korea’s SK Hynix and Samsung Electronics falling 3.5 percent and 0.7 percent respectively early Tuesday. Japan’s Kioxia Holdings gave up 2.4 percent and Taiwan Semiconductor Manufacturing Co. lost 0.8 percent. The index heavyweights sent regional benchmarks down with South Korea’s Kospi falling 3.4 percent and Japan’s Nikkei Stock Average 0.9 percent lower the analysis noted.
Chris Weston head of research at Pepperstone said in the Morningstar note that investors are becoming more selective instead of treating the entire ecosystem as one trade. The market does not need every AI infrastructure company to succeed for the investment theme to work he added. Oil regained momentum amid continued concerns over supply disruption risks according to the same report.
While Persian Gulf oil flows improved in the second week of October the recovery may be under threat amid increased attacks ANZ Research analysts said in the Morningstar note. Analysts say investors are also waiting for the upcoming slew of earnings reports from various major companies the Associated Press reported. This comes as markets assess whether the rebound in select technology names can extend amid broader economic uncertainties.
