The Asian markets displayed a mixed trend on Monday, primarily due to the decline in artificial intelligence-related stocks. Japanese and South Korean benchmarks saw declines, while gains in other sectors managed to buffer some of those losses.
Market Movements
U.S. futures showed some upward movement, and oil prices also increased, stabilizing near their previous levels before the onset of the Iran conflict in late February. Over the weekend, the U.S.-Iran tensions intensified with Iran launching drone and missile attacks on Bahrain and Kuwait in response to recent U.S. airstrikes. This has added to the global economic uncertainties.
In Tokyo, the Nikkei 225 dropped by 1% to 68,704.70, following a 4.2% decline on Friday. SoftBank Group, heavily invested in OpenAI, saw a 5.9% dip after a significant 12.5% drop on the previous trading day.
South Korea’s Kospi fell by 2% to 8,246.50, adding to a 5.8% decrease from Friday. Samsung Electronics saw a 6% decline, while SK Hynix, a memory chipmaker, decreased by 4.5%.
Taiwan’s Taiex index increased by 1.1%, recovering some losses from a 3.6% drop on Friday. Taiwan benefits from the global AI boom through tech giants like TSMC.
Mixed Global Performance
Hong Kong’s Hang Seng rose by 2.1% to 23,153.89, while the Shanghai Composite index increased slightly by 0.2% to 4,034.08. Australia’s S&P/ASX 200 showed a 0.4% rise, reaching 8,798.00. Meanwhile, India’s Sensex remained almost unchanged.
On Friday, Wall Street experienced mixed results due to concerns over AI valuations. The S&P500 saw a minor loss of less than 0.1% to 7,354.02, and the Nasdaq composite decreased by 0.2%, reaching 25,297.62. The Dow Jones Industrial Average fell slightly by 0.1% to 51,876.11.
Prominent tech firms were affected, with Micron Technology’s shares declining by 6.7%, Intel by 3.4%, Nvidia by 1.6%, and AMD dropping 2.1%.
Oil Market Concerns
Early Monday trading showed Brent crude rising by 0.7% to $73.27 per barrel, up from around $72 before the conflict. U.S. crude increased by 0.8%, priced at $70.02 per barrel.
Despite various optimistic assumptions, significant risks remain for the oil market due to U.S.-Iran tensions. Concerns center on the safety of shipping routes in the Strait of Hormuz, where recent attacks on vessels have occurred.
ING commodities strategists Warren Patterson and Ewa Manthey indicated in their Monday commentary that traders might be overly optimistic about the recovery in Persian Gulf oil supplies, presenting potential upside risks if supply issues persist or if the conflict escalates.
Currency Exchange
In currency markets, the U.S. dollar strengthened slightly against the Japanese yen, rising to 161.81 yen from 161.71 yen. The euro held steady at $1.1386.