Asian trading is mixed as tech sell-off deepens and oil prices rebound
Shares in Asia were mixed Tuesday as markets like South Korea and Taiwan that are heavily weighted toward technology shares fell to their lowest levels in three months following a sell-off on Wall Street.
U.S. futures edged lower and oil prices moved higher.
South Korea's benchmark Kospi fell 4% to close at 5,626.08. Memory chipmaker SK Hynix dropped 5.7% and Samsung Electronics declined 4%, giving up Monday's gains.
Markets in Tokyo were closed for a holiday.
In Hong Kong, the Hang Seng added 0.4% to 23,474.98.
The Shanghai Composite index retreated 1.4% to 3,588.50, near its lowest level in more than a year. Gains from market-supporting measures announced Monday were short-lived.
Australia's S&P/ASX 200 rose 0.3% to close at 8,880.50. The Reserve Bank of Australia raised its benchmark interest rate by a quarter percentage point to 4.85%, the highest the cash rate has been since it stood at 5.25% in December 2008.
It was the fifth rate hike this year.
Reserve Bank Governor Michele Bullock said in a statement that inflation remains broadly based.
"This partly reflects higher fuel and other commodity prices affected by the conflict in the Middle East," the statement said. "AI-related investment is driving rapid growth in prices for technology-related goods, and inflation in many goods and services remains high," it said.
Taiwan's Taiex slid 3.8%. Taiwan Semiconductor Manufacturing Corp. sank 1.9% and chip designer Mediatek plunged 7.6%.
India's Sensex climbed 1.1%.
On Monday, the S&P 500 sank 0.5%, erasing a 1.1% gain earlier in the day. The Dow Jones Industrial Average rose 0.4%, while the Nasdaq composite fell 1.1%.
The mixed performance for indexes came even though the majority of stocks within the S&P 500 climbed. They benefited from a recent 7.6% drop in the price of a barrel of Brent crude, which closed at $104.77. It's the latest yo-yo move for oil prices on uncertainty about when the war with Iran will end, allowing the global industry to return to normal.
The price for the most actively traded contract in the Brent market has been veering between roughly $70 and $120 per barrel since just before the war with Iran began, and it's been quick to reverse direction.
So have stocks in the artificial-intelligence industry, which have been shaky for months amid criticism that they have surged too high and are in a bubble. Worries are growing that all the hundreds of billions of dollars Big Tech companies are pouring into AI data centers won't yield enough productivity and profit to make the investments worth it.
The latest profit reports from Alphabet and other Big Tech companies also showed how AI may be dragging on their own businesses. Google's parent company burned through more cash during the latest quarter, as measured by something called free cash flow, and it reported slower-than-expected growth in its search business.
Alphabet initially rallied 2.6% on Monday, but it finished with a loss of 0.3%. Nvidia went from an early gain of 2.6% to a drop of 1.3%. Such swings have dragged the rest of the market with them.
Still, nearly seven out of every 10 stocks in the S&P 500 index rose.
Expectations are high for all kinds of companies to continue to deliver big gains in profits as the U.S. economy keeps chugging along, even with high inflation and interest rates. That helped send the S&P 500 to its record last month.
A report Monday said U.S. manufacturing improved last month by more than economists expected. Also, a measure of inflation in the survey by the Institute for Supply Management showed prices were rising at a slower pace.
In other dealings Tuesday, the price of Brent crude, the international standard, climbed 1% to $105.85 a barrel. U.S. benchmark crude oil rose 1.1% to $97.48 per barrel.
The U.S. dollar fell to 157.84 Japanese yen from 157.95 yen. The euro rose to $1.1198 from $1.1188.
Source: Associated Press
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