Asian equities were mostly lower Tuesday morning amid AI-related concerns and ongoing Middle East tensions that undermined appetite for risky assets.
The declines across most stock markets in the region followed an overnight drop in U.S. shares tied to the artificial-intelligence trade ahead of Wednesday's key earnings update from Nvidia. Chip, memory and other infrastructure names were among the biggest losers in the S&P 500 index on Monday.
South Korea's Kospi fell 2.1%, with chip-making index heavyweight SK Hynix dropping 5.1% and Samsung Electronics declining 2.9%. Japan's Nikkei Stock Average lost 0.5%. Japanese electronics manufacturer Panasonic shed 3.0% and Disco Corp., a precision tool maker for the semiconductor industry, lost 2.9%. Meanwhile, Singapore's FTSE Straits Times Index was little changed and Australia's S&P/ASX 200 benchmark index rose 0.5%.
"The main theme was renewed pressure on technology and semiconductor stocks," Commerzbank Research analysts said in a note. "Investors turned cautious ahead of a major AI earnings report due on Wednesday after the close, which could test whether strong underlying demand can offset concerns over valuations and returns on investment," the analysts added.
Crude oil futures were lower as traders weighed new U.S. measures against Iran. Treasury Secretary Scott Bessent said Monday that the U.S. is launching a new campaign to isolate the Iranian regime.
Bessent said his department has "mapped every node, every facilitator and every network that Iran has used to smuggle oil and evade sanctions." He said the U.S. was sanctioning more than 60 entities, individuals and vessels across the world that enable the regime to procure nuclear and missile technology, earn revenue from oil and carry out cyber operations.
"The targets are digital assets, technology, gold, aviation and shipping," said Joseph Capurso, head of foreign exchange, international and geoeconomics at Commonwealth Bank of Australia, in a note. "We do not expect China--Iran's largest trade partner--to bow to U.S. pressure to cease commerce with Iran. The U.S.' campaign against Iran puts at risk the trade truce between the U.S. and China ahead of the leaders meeting next month," Capurso added.
Front-month West Texas Intermediate crude oil futures edged 0.2% lower to $84.82 per barrel and front-month Brent crude oil futures declined 0.4% to $91.83 a barrel, according to ICE data.
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