Jornal Do Brasilia - Asian stocks retreat as AI worries outweigh steep oil-price drop

HONG KONG: Asian stock markets struggled on Tuesday after another AI-fueled tech selloff on Wall Street outweighed a plunge in oil prices and signs of a possible breakthrough in talks to end the Iran war. Investors were also watching the US midterm elections. Fears about the vast sums being invested in artificial intelligence (AI) have weighed on trading floors in the second half of the year, with many investors questioning whether firms will turn a profit. Earnings reports from Amazon, Alphabet, Meta and Microsoft have shown they will keep pouring hundreds of billions of dollars into data centers and chips, even as investors grow impatient for returns.

On Monday, Apple posted sales and profits that beat forecasts but warned that its gross margin, the share of sales left after production costs, would drop in October-December. Earlier, AI firm Anthropic reported a over 1,100 percent surge in quarterly revenue and almost $900 billion in spending commitments ahead of its Wall Street listing later this month. The investment pledges come amid a surge in borrowing costs, which has raised concerns about some companies’ heavy debts and added to the pressure on stock prices. The selling continued at the start of this week, after a tough run last week. Asian giants fell first, then their US counterparts, and the Nasdaq ended 1.1 percent lower. On Tuesday, Seoul-listed SK hynix and Samsung sank around 4 percent, dragging the Kospi down over 2 percent. Taipei, Shanghai, Sydney, Singapore and Wellington also fell, while Hong Kong, Manila and Jakarta edged up. Tokyo was closed for a holiday.

Even a plunge of over 7 percent in oil prices on Monday failed to lift the market. The “collapse in crude should have been rocket fuel for the battered growth trade”, said Stephen Innes of SPI Asset Management. “Instead, the Nasdaq handed back the entire opening bounce and broke Friday’s lows, a fairly ugly sign that the selling is now being driven by something deeper than oil, yields or the dollar.” Crude extended its losses in early Asian trade as the US and Iran both sounded optimistic. US President Donald Trump signaled progress in talks on Monday, and Vice President JD Vance said both men were optimistic about reaching an agreement. Iranian President Masoud Pezeshkian said the country’s supreme leader had given his government more authority to pursue peace talks.

Rodrigo Catril of National Australia Bank urged caution. “It is worth noting that the US and Iran’s positions have not materially changed,” he wrote in a commentary. “Bottom line: for the stalemate to end, somebody needs to give ground, and it is unclear if either side is willing to do so.” central figures at around 0230 GMT Hong Kong - Hang Seng Index: UP 0.5 percent at 23,514.41 Shanghai - Composite: DOWN 0.7 percent at 3,611.04 Seoul - Kospi: DOWN 2.5 percent at 5,714.86 Tokyo - Nikkei 225: Closed for a holiday West Texas Intermediate: DOWN 0.2 percent at $96.27 per barrel Brent North Sea crude: DOWN 0.3 percent at $104.45 per barrel Euro/dollar: DOWN at $1.1181 from $1.1193 on Monday Pound/dollar: DOWN at $1.3400 from $1.3410 Dollar/yen: DOWN at 157.90 yen from 157.92 yen Euro/pound: DOWN at 83.44 pence from 83.46 pence New York - Dow: UP 0.4 percent at 51,983.98 (close) London - FTSE 100: UP 0.3 percent at 10,761.33 (close) — AFP

M. Oliveira--JDB