HONG KONG – Asian markets took a dip on Thursday, largely impacted by a significant sell-off in computer chip stocks. Meanwhile, U.S. futures barely shifted after Wall Street closed with slight losses the previous day.
In a related development, oil prices dropped as U.S. and Iranian officials met separately with mediators from Qatar and Pakistan, aiming for steps toward a permanent resolution to the ongoing conflict in Iran.
In South Korea, the Kospi index plunged by 5.1%, settling at 7,877.45, pushed down by significant losses in chip-related stocks. SK Hynix, a major player in memory chips, saw its share price drop by 7.7%, while Samsung Electronics also faced a decline, losing 6.4% of its value.
Japan’s Nikkei 225 slipped by 1.5%, ending at 69,443.16. Shares of Tokyo Electron, which specializes in chip-making equipment, experienced a decrease of 5.6%.
Over in Taiwan, the Taiex index fell by 1.1%. Notably, Taiwan Semiconductor Manufacturing Corp. (TSMC), the leading global chipmaker, saw its shares decline by 1.8%, contributing to the island’s broader market downturn.
Hong Kong’s Hang Seng was up 0.8% to 23,060.63. Chinese electric vehicle maker BYD’s shares rose 8.7% after it reported its sales rose for a second straight month. The Shanghai Composite index fell 0.9% to 4,075.58.
Australia’s S&P/ASX 200 edged 0.1% lower to 8,710.30.
India’s Sensex climbed 0.5%.
Surging demand for artificial intelligence has pushed many AI and tech stocks higher in recent months, with markets in South Korea, Japan and Taiwan reaping big gains. The Kospi and Nikkei 225 have gained about 85% and 34%, respectively, so far this year.
However, concerns over a potential glut in supply given the massive investments made by Big Tech companies in the U.S. and elsewhere have been clouding investor sentiment.
On Wednesday, chip stocks in the U.S. mostly fell. Micron Technology gave up 10.6%, Intel sank 9%, AMD, or Advanced Micro Devices, dropped 6.9%, Broadcom lost 2.2% and Nvidia slipped 1.3%.
The S&P 500, Wall Street’s benchmark, fell 0.2% to 7,483.23. The Dow Jones Industrial Average slipped less than 0.1% to 52,305.24, and the technology-heavy Nasdaq composite dropped 0.7% to 26,040.03.
“AI demand may continue to grow but at a slower pace than expected,” economists Megan Fisher and Vicky Redwood at Capital Economics wrote in a note on Thursday. “Firms and investors may be underestimating the barriers to AI adoption.”
While transformative technologies can be adopted widely, they may still fall short of generating financial returns soon enough in order to justify the massive scale of investments made by many firms, the economists said.
Oil prices fell early Thursday, trading at levels below where they were before the Iran war began in late February. Hopes have risen that crude supplies will improve markedly with the reopening of the Strait of Hormuz, the narrow waterway that’s key for the world’s oil transport, even though the number of ships crossing the strait is still limited.
Brent crude, the international standard, fell 1% to $70.89 per barrel, lower than the roughly $72 a barrel before the start of the war. Benchmark U.S. crude also fell 1%, to $67.91 per barrel.
In other dealings, the U.S. dollar was trading at 162.39 Japanese yen, down from 162.58 yen, after the yen fell to a four-decade low against the dollar on Wednesday. The euro was trading at $1.1387, up from $1.1377.
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AP Business Writer Stan Choe contributed to this report.
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