Tokyo: Asian shares traded mixed early Wednesday, as fading enthusiasm over AI and other technology stocks gradually put the brakes on Wall Street's record-setting run. Japan's benchmark Nikkei 225 edged up less than 0.1 per cent to 62,774.94. South Korea's Kospi index gained 0.9 per cent to 7,708.05, recouping some of its recent losses. The Kospi sank 2.3 per cent earlier in the week from an all-time high after a senior figure in the administration suggested the government may redistribute windfall AI profits from companies to citizens.
Australia's S&P/ASX 200 lost 0.3 per cent to 8,645.80. The Hang Seng slipped 0.4 per cent to 26,246.29, while the Shanghai Composite was little changed, down less than 0.1 per cent at 4,213.86. “Corporate earnings and AI momentum are acting as the market's primary shock absorbers, but the road is getting significantly rougher,” said Tim Waterer, chief market analyst at KCM Trade.
“With oil prices becoming entrenched at elevated levels and a diplomatic breakthrough between the US and Iran remaining elusive, the easy bullish narrative is becoming much harder to maintain.” In energy trading, benchmark US crude fell 58 cents to USD 101.60 a barrel. Brent crude lost 66 cents to USD 107.11 a barrel. Those prices are still way above what they were before the war with Iran, which threatens to drag on, the ceasefire looking more tenuous. Brent has surged from roughly USD 70 per barrel before the war. The war has essentially shut the Strait of Hormuz to oil tankers.
On Wall Street, the S&P 500 fell 0.2 per cent from its all-time high set the day before. The Dow Jones Industrial Average added 56 points, or 0.1 per cent, while the Nasdaq composite sank 0.7 per cent from its own record. Some of the sharpest drops hit chip companies and stocks that have been on electric runs because of the artificial-intelligence boom. Intel slumped 6.8 per cent after seeing its stock more than triple so far this year. Micron Technology dropped 3.6 per cent.
Treasury yields rose in the bond market following an initial zigzag, suggesting traders suspect the Federal Reserve will keep interest rates high to combat inflation. The yield on the 10-year Treasury rose to 4.45 per cent on Tuesday from 4.42 per cent late Monday and remains well above its 3.97 per cent level from before the war. Traders expect the Federal Reserve to keep its main interest rate steady.
All told, the S&P 500 fell 11.88 points to 7,400.96. The Dow Jones Industrial Average added 56.09 to 49,760.56, and the Nasdaq composite sank 185.92 to 26,088.20. In currency trading, the US dollar rose to 157.70 Japanese yen from 157.59 yen. The euro cost USD 1.1741, inching down from USD 1.1744.
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