Oil prices experienced a decline on Wednesday as Asian shares mostly traded lower. South Korea’s Kospi extended its losses, dropping more than 16% over two days. This came as the U.S. announced it conducted significant strikes against Iran following an attack on a U.S. base. U.S. futures saw a slight rise after recent declines on Wall Street.
In South Korea, the Kospi index’s recent drop is partly due to skepticism about large investments by tech giants in artificial intelligence. The index fell by 1.3% on Thursday to 5,587.82, continuing its downward trend after a 10.8% fall on Tuesday and nearly 6% on Wednesday. While the Kospi has dropped over 35% from its peak of above 9,000 in June, it remains about 30% higher for the year. Samsung Electronics rose by 2.4% following its report of a record quarterly operating profit, meeting expectations.
Conversely, SK Hynix saw a 4% drop, adding to more than a 9% loss on Wednesday after its report of a record operating profit, which expanded nearly sixfold. The results fell short of analyst predictions, leading to a sell-off of its shares.
In Tokyo, the Nikkei 225 advanced by 0.6% to 61,778.02. SoftBank Group fell by 2.7%, but Tokyo Electron rose by 4.4%, and Kioxia Holdings increased by 7.5%. Taiwan’s Taiex, also buoyed by the AI surge, gained 0.8%, with TSMC trading 1.8% higher. Hong Kong’s Hang Seng slightly declined by less than 0.1% to 25,779.70, while the Shanghai Composite index fell by 1.2% to 3,784.55.
In Australia, the S&P/ASX 200 fell by 0.9% to 8,959.90. Meanwhile, India’s Sensex recorded a minor gain of less than 0.1%. Oil prices decreased on Thursday amid ongoing U.S.-Iran tensions. President Donald Trump announced severe actions against Iran following attacks on a U.S. base in Jordan. The Strait of Hormuz, vital for oil transport, experienced constrained traffic, affecting global supplies. Brent crude fell by 1% to $87.18 per barrel, after a sharp rise the previous day, having been around $72 in late February before hostilities began. U.S. crude also dropped by 0.9% to $83.74 per barrel.
On Wednesday in the U.S., the S&P 500 decreased by 1.5% to 7,316.15. The Dow Jones dropped by 2.2% to 51,594.14, and the Nasdaq, known for its tech stocks, fell by 1.7% to 24,442.94. Key chipmakers like Nvidia and AMD saw declines, with Nvidia losing 3.6% and AMD dropping 5.5%. Broadcom was down by 2.8%.
The sell-off in U.S. stocks followed the Federal Reserve’s decision to maintain current interest rates, despite some committee members advocating for a rate hike. Fed Chairman Kevin Warsh emphasized the goal of reducing inflation to 2%. However, he continued to limit the Fed’s forward guidance on interest rate policy, contributing to potential market volatility. Warsh stated in a news conference, “Did the Fed take an explicit change in its policy rate today? No, but I think that’s the beginning of the story.”
On the bond front, the yield on the U.S. 10-year Treasury rose to 4.70% from 4.61% on Tuesday. Early Thursday, the U.S. dollar increased against the Japanese yen to 163.49 from 163.41, while the euro slightly decreased to $1.1454 from $1.1467.
Contributors to this report include AP Business Writers Stan Choe and Matt Ott.
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