Asian stocks traded mixed on Tuesday as a strong rally in South Korean semiconductor shares supported regional technology markets.
However, higher oil prices, rising US Treasury yields and growing expectations for tighter monetary policy limited broader risk appetite.
Asian Stocks Follow Mixed Wall Street Session
The moves followed a mixed session on Wall Street.
The Nasdaq 100 gained around 0.2% as semiconductor stocks rallied, while broader US equities remained under pressure.
During Asian trading hours, Nasdaq 100 futures climbed 0.6% to 29,746.00. S&P 500 futures also moved slightly higher to 7,723.25.
Investors remain cautious as markets assess the outlook for US interest rates.
Fed Rate Hike Expectations Increase
A stronger-than-expected US jobs report has shifted expectations for the Federal Reserve.
Markets are now pricing roughly a 60% chance of a 25-basis-point rate hike at the September 16 meeting.
The US 10-year Treasury yield traded near 4.788%, adding pressure to equity valuations.
Investors are also waiting for Friday’s US inflation report, which could provide further clues about the Fed’s next policy move.
Oil Prices Add Pressure to Markets
Oil prices extended gains for a third consecutive session.
Brent crude rose around 0.5% to $97.46 per barrel as investors monitored developments involving Iran, Oman and shipping through the Strait of Hormuz.
Iran has threatened retaliation against further attacks on Gulf energy infrastructure.
Concerns about possible supply disruptions have pushed crude prices higher and increased inflation risks.
Higher energy prices could make it more difficult for central banks to ease monetary policy, creating another challenge for stock markets.
South Korean Chipmakers Lead Technology Rally
South Korea was one of the strongest markets in the region.
The KOSPI climbed 2.3%, supported by strong gains in major semiconductor companies.
SK Hynix surged 5.7% to 1.884 million won, while Samsung Electronics gained 3.2% to 278,500 won.
The rally reflected renewed optimism surrounding artificial intelligence and semiconductor demand.
South Korea’s economy also grew 0.6% quarter-on-quarter during the second quarter, beating expectations for 0.2% growth.
Strong semiconductor exports played an important role in supporting the economy.
AI Optimism Supports Semiconductor Stocks
Other Asian chipmakers also posted gains.
Japan’s Kioxia rose 1.2%, while Taiwan Semiconductor Manufacturing gained around 1%.
However, the broader technology supply chain showed a more mixed performance.
TDK fell 4.3%, Murata Manufacturing declined 4.6% and LG Innotek dropped 4.3%.
Largan lost 4.1%, while Sony fell 2.4%.
Foxconn also slipped 1.5% despite reporting record August revenue and issuing an upbeat outlook for the third quarter.
Japan Stocks Flat as BOJ Rate Bets Rise
Japan’s Nikkei 225 traded near flat as investors assessed stronger economic data and the possibility of another Bank of Japan interest-rate increase.
Japan’s economy grew at an annualised 1.4% pace in the second quarter, revised higher from an earlier estimate of 1.1%.
Real wages also rose 2.4% year-on-year in July, marking the strongest increase since May 2021.
The stronger data increased expectations that the Bank of Japan could raise interest rates again next week.
Higher rates could support the yen but may also create pressure for Japanese equities.
Hong Kong Technology Stocks Decline
Hong Kong’s Hang Seng Index fell around 0.5%, with several major technology stocks under pressure.
Xiaomi declined 2.4%, Baidu fell 1.3%, JD.com slipped 0.4% and Tencent lost 0.2%.
However, Meituan gained 1.9%, while NetEase rose 0.6%.
The weakness in Hong Kong contrasted with modest gains in mainland Chinese markets.
Chinese Stocks Gain After Strong Trade Data
China’s CSI 300 edged 0.06% higher, while the Shanghai Composite gained 0.36%.
Investors also reacted to stronger-than-expected Chinese trade activity.
China’s exports increased 25% year-on-year in August, matching market forecasts.
Imports jumped 28.2%.
High-tech and artificial intelligence-related products were among the main drivers of export growth.
The strong figures highlighted resilient overseas demand despite continued weakness in China’s domestic economy.
Shenzhen Longsys IPO Gets Muted Reception
Memory-chip maker Shenzhen Longsys Electronics had a subdued market debut.
The company’s shares opened flat at HK$236 before trading slightly below that level.
Longsys raised approximately HK$7.08 billion through its initial public offering.
The weak debut added to cautious sentiment across Hong Kong’s technology sector.
Australian Stocks Fall on Consumer Concerns
Australia’s S&P/ASX 200 fell around 0.8%.
Consumer sentiment dropped sharply in September as higher petrol prices and interest-rate concerns weighed on household confidence.
The decline increased worries about the outlook for consumer spending and the broader Australian economy.
Other Asian Markets Trade Mixed
Markets elsewhere in Asia also showed mixed performance.
Singapore’s Straits Times Index fell 0.4%, while India’s Nifty 50 declined by a similar amount.
Indonesia’s Jakarta Composite performed better, gaining around 0.7%.
The MSCI Asia Pacific Index rose 0.4%, largely supported by gains in South Korean semiconductor stocks.
AI Earnings Remain in Focus
Investors will also watch upcoming earnings from Oracle and Adobe on Thursday.
The results could provide fresh clues about corporate spending on artificial intelligence infrastructure.
They may also offer insight into how AI is affecting traditional software companies.
Asian Market Outlook Remains Cautious
Asian stocks continue to receive support from strong semiconductor demand and enthusiasm around artificial intelligence.
However, rising oil prices, higher bond yields and expectations for tighter monetary policy are limiting broader market gains.
Investors will now focus on US inflation data, central bank decisions and upcoming technology earnings for the next major direction in Asian equities.
