TOKYO: Asian shares reversed course on Thursday after the previous day’s AI-fuelled rally, as fickle enthusiasm over AI spending turned cautious, while oil prices held in a tight range as markets assessed prospects for an Iran peace deal.
MSCI's broadest index of Asia-Pacific shares outside Japan, opens new tab fell 1.39%, led by declines in tech firms. South Korean shares, opens new tab extended losses to 4.16%, while Japan's Nikkei, opens new tab was down 0.94%, paring an earlier drop of as much as 2.05%.
In Seoul, Samsung Electronics, opens new tab fell 6% and peer SK Hynix, opens new tab plunged nearly 10%. In Tokyo, Kioxia, opens new tab lost 8.2%, while Tokyo Electron, opens new tab slumped 5.18%.
The pullback followed a weaker session on Wall Street overnight, where the Nasdaq, opens new tab snapped a days-long winning streak as shares of Elon Musk-led SpaceX, opens new tab and Advanced Micro Devices, opens new tab stumbled after their quarterly earnings.
Although the AI and satellite company highlighted faster-than-expected returns from its AI spending, investors remained concerned about how long its profitable Starlink business could continue to bankroll costly investments in data centres.
And while AMD’s results beat analysts' estimates, they fell short of investors' lofty expectations.
Brent crude futures fell to $79.01 per barrel, down 0.55%. U.S. West Texas Intermediate futures edged 0.65% down to $74.73 a barrel.
Madison Cartwright, senior geo-economics analyst at Commonwealth Bank of Australia, said a deal to reopen the Strait of Hormuz could be reached by early September, though he remained sceptical that a deal was imminent.
Futures markets are pricing in about a 54% chance of a rate hike at the Federal Reserve's September meeting, down from 58% a day ago, according to the CME's FedWatch tool. ـــReuters
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