Asian markets displayed varied outcomes on Monday. The selling of stocks related to artificial intelligence negatively impacted indices in Japan and South Korea. Despite this, positive performances in other sectors helped balance these losses.
Market Performances
U.S. futures saw an upward trend, and oil prices rose, although they remained near pre-Iran war levels from late February. Over the weekend, U.S.-Iran tensions heightened, with Iran launching drone and missile strikes on Bahrain and Kuwait in retaliation for new U.S. airstrikes. These developments contribute to the uncertainty surrounding global economic forecasts.
In Japan, the Nikkei 225 dropped 1% to 68,704.70, following a 4.2% decrease the previous Friday. The SoftBank Group, an investment entity in OpenAI, saw its shares fall 5.9%, adding to a 12.5% decline from Friday.
South Korea’s Kospi index fell 2% to 8,246.50, after losing 5.8% on Friday. Notably, Samsung Electronics declined 6%, and SK Hynix, a memory chip manufacturer, fell 4.5%.
The Taiex index in Taiwan, benefiting from the global AI surge due to its strong tech sector including TSMC, rose 1.1%, recovering some of its 3.6% loss from Friday.
Japan and South Korea’s markets have experienced significant growth as demand for computer chips and AI-related components soared. However, recent concerns over AI stock values have cut into some of these gains.
Other Market Movements
Hong Kong’s Hang Seng index climbed 2.1% to 23,153.89. The Shanghai Composite index experienced a minor increase of 0.2% to 4,034.08. Australia’s S&P/ASX 200 improved by 0.4% to 8,798.00, while India’s Sensex remained largely stable.
On Friday, AI valuation worries affected Wall Street, with mixed results. The S&P 500 saw a minimal loss of less than 0.1% to 7,354.02. The Nasdaq composite, known for its tech focus, decreased by 0.2% to 25,297.62. The Dow Jones Industrial Average dropped 0.1% to 51,876.11.
Key tech stocks displayed significant declines. Micron Technology’s shares fell 6.7%, Intel lost 3.4%, Nvidia saw a 1.6% decrease, and AMD dropped 2.1%.
Oil and Commodities
Early trading on Monday showed Brent crude rising 0.7% to $73.27 a barrel, up from approximately $72 before the war’s onset. Benchmark U.S. crude increased by 0.8% to $70.02 a barrel.
“There’s still plenty of risk facing the oil market on U.S.-Iran re-escalation,” ING commodities strategists Warren Patterson and Ewa Manthey commented on Monday. Concerns linger about the safety of ships in the Strait of Hormuz following vessel attacks.
They noted that oil traders remain overly optimistic about the recovery timeline for Persian Gulf supplies. “This complacency is odd and clearly leaves significant upside risk if the supply recovery proves slow or if we see significant re-escalation,” the commentary stated.
Currency Movements
In currency trading, the U.S. dollar increased to 161.81 Japanese yen from 161.71 yen. The euro remained unchanged at $1.1386.