Most Asian stocks moved in a flat-to-low range on Tuesday as a recent chip-fueled runup in technology shares lost steam, while markets remained on edge over few signs of de-escalation in the U.S.-Iran conflict.
South Korean stocks were the worst performers in the region, seeing a heavy dose of profit-taking after rallying to a series of record highs through April and early-May.
Regional markets took middling overnight cues from Wall Street, which just eked out record high closes on gains in tech. But persistent concerns over dithering U.S.-Iran peace talks kept gains in check.
S&P 500 Futures fell 0.2% in Asian trade. Focus was also on U.S. consumer price index inflation data due later in the day.
S.Korea’s KOSPI falls from record highs as chips lose steam
South Korea’s KOSPI was the worst performing Asian bourse, losing as much as 4% in volatile trade. The index briefly hit a record high in early trade before sharply reversing course.
Local stocks, especially chipmakers, were subject to profit-taking after a stellar run-up in recent months. The sector was boosted chiefly by optimism over increased demand in the artificial intelligence sector.
Samsung Electronics Co Ltd (KS:005930) fell as much as 4%, while SK Hynix Inc (KS:000660) logged sharp swings.
Focus is squarely on talks between Samsung and its largest labor coalition ahead of a planned strike from May 21– a move that could greatly hurt global memory chip production.
While Samsung and its rivals had risen in anticipation of potential supply disruptions, a strike could also hurt Samsung during a time of heightened memory chip demand.
Asia stocks mixed with US-China summit, Iran tensions in focus
Broader Asian markets were a mixed bag on Tuesday, with Japan’s Nikkei 225 and TOPIX indexes rising 0.5% apiece. Japanese markets largely shrugged off bets on an interest rate hike by the Bank of Japan, after a summary of opinions showed a growing hawkish tilt at the central bank during its April meeting.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes were flat, while Hong Kong’s Hang Seng clocked mild gains.
Focus this week is also on U.S. President Donald Trump’s China summit with President Xi Jinping. The two are expected to discuss a slew of issues amid battered relations between the world’s two largest economies.
Australia’s ASX 200 fell 0.4%, pressured by losses in tech stocks, while Singapore’s Straits Times index was flat.
Futures for India’s Nifty 50 index fell 0.2%, pointing to extended losses after the index slid 1.5% on Monday. Indian markets were spooked by a warning from Prime Minister Narendra Modi on potential economic hardships due to fuel shortages stemming from the Iran war.
Markets remained on edge over the conflict, with reports indicating that the U.S. was considering more military options against Iran after a peace proposal largely fell through.
Oil prices remained upbeat, keeping markets on edge over the inflationary impact of the war.
Source: Investing