HONG KONG — Oil prices rose on Wednesday, with Asian stocks mainly lower as South Korea’s Kospi widened its losses after falling more than 16% in the past two days led by artificial intelligence stocks.
Oil prices remain volatile after the United States announced early Thursday that it had launched a “large wave” of attacks against Iran in response to attacks on U.S. military bases.
U.S. futures rose slightly on the back of losses on Wall Street.
In South Korea, the recent decline in the company’s benchmark Kospi, which has benefited greatly from the global AI boom, is seen by some analysts as a reflection of widespread doubts about the tech giant’s huge investments in expanding its AI capabilities.
The Kospi traded wildly on Thursday, dropping 10.8% on Tuesday and nearly 6% on Wednesday, before ending 1.2% lower at 5,593.56. The benchmark is down more than 38% from its all-time closing high of more than 9,100 in June, but is still up nearly 30% since the beginning of the year.
Samsung Electronics fell 0.7%, even as the South Korean technology giant said it posted operating profit for its latest quarter, mostly in line with expectations.
Semiconductor maker SK Hynix fell 5.6% after falling more than 9% on Wednesday, when it announced quarterly operating profit soared nearly sixfold to a record high. This was still below analysts’ expectations, and disappointed investors dumped the company’s stock.
In Tokyo, the Nikkei Stock Average rose 0.7% to 61,867.43 yen, partially reversing the previous day’s 1.5% drop. SoftBank Group, which invests in open AI, fell 2.5%. However, computer chip equipment maker Tokyo Electron rose 4.5%. Memory chip maker Kioxia Holdings rose 2.9%.
Taiwan’s Tyex, which also rose due to the AI boom, closed 0.3% lower. Major semiconductor maker TSMC rose 0.2%.
Chi Lo, senior market strategist for Asia Pacific at BNP Paribas Asset Management, said in a commentary on Thursday that AI stocks, including South Korea, Taiwan and Japan, are facing volatility due to huge spending on AI infrastructure by tech companies and questions about whether it can generate sustainable returns.
“The recent recognition that Chinese AI is a serious competitor to the current AI market leader has raised (and) exacerbated these concerns again,” he said.
Hong Kong’s Hang Seng rose 0.2% to 25,857.11. The Shanghai Composite Index fell 0.7% to 3,801.67.
In Australia, the S&P/ASX 200 fell 0.8% to 8,967.70.
India’s Sensex rose less than 0.1%.
Oil prices rose after falling early on Thursday as the United States and Iran resumed exchanging attacks. US President Donald Trump said the US would attack Iran “very hard” after Iran targeted US military bases in Jordan. Maritime traffic in the Strait of Hormuz, a key waterway for oil transport, remains restricted, putting pressure on global supplies.
Brent crude oil, the international standard crude oil, rose 0.6% to $88.60 per barrel. In late February, before the war began, it was trading at around $72 per barrel.
Benchmark U.S. crude oil rose 0.3% to $84.70 per barrel.
In the United States on Wednesday, the benchmark S&P 500 index fell 1.5% to 7,316.15. The Dow Jones Industrial Average fell 2.2% to $51,594.14, and the tech-heavy Nasdaq Composite Index fell 1.7% to $24,442.94.
Several major chip manufacturers went bankrupt. Nvidia fell 3.6% and AMD (Advanced Micro Devices) fell 5.5%. Broadcom fell 2.8%.
U.S. stocks also fell after the Federal Reserve decided to keep interest rates unchanged, even though some members of the policymaking committee had hoped to raise them.
Federal Reserve Chairman Kevin Warsh reiterated his commitment to bringing inflation back to 2% after years of faster-than-expected price increases, but also stuck to his plan to give financial markets fewer clues about what the Fed will do with interest rates in the near future.
With less Fed guidance, financial markets could trade more volatile amid uncertainty.
“Did the Fed specifically change its policy rates today?” Warsh asked rhetorically at a press conference after the Fed’s decision. “No, but I think that’s where the story begins.”
In the bond market, the yield on the 10-year U.S. Treasury note rose to 4.68% from 4.61% late Tuesday.
In other trading early Thursday, the dollar rose to 163.60 yen from 163.41 yen. The euro is trading at $1.1443, down from $1.1467.
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AP Business Writer Stan Choe contributed to this report.
Jang Ho-him, Associated Press
