Asian shares are mixed as tech losses offset broader gains on Wall Street

Asian stock markets exhibited a mixed performance on Tuesday, as technology-heavy sectors in countries like South Korea and Taiwan faced declines following a downturn on Wall Street. Meanwhile, U.S. futures saw slight decreases, and oil prices experienced an uptick.

In South Korea, the Kospi index fell by 2.5%, settling at 5,712.57. Major tech firms were notably impacted, with SK Hynix's shares dropping 3.6% and Samsung Electronics declining by 2.9%, reversing gains made the previous day. Markets in Tokyo were closed due to a public holiday.

Conversely, the Hang Seng index in Hong Kong saw a modest increase of 0.3%, reaching 23,469.64. In contrast, the Shanghai Composite index declined by 0.7%, ending the day at 3,614.17, as the positive effects of market-supporting measures announced on Monday quickly faded.

In Australia, the S&P/ASX 200 rose by 0.4%, closing at 8,890.90. The Reserve Bank of Australia took action by raising its benchmark interest rate by a quarter percentage point to 4.85%, marking the highest level since December 2008, when it was at 5.25%. This decision represented the fifth rate hike for the year. Reserve Bank Governor Michele Bullock commented that inflation remains widespread, attributing part of the rise to increased fuel and commodity prices influenced by the ongoing conflict in the Middle East. Additionally, she noted that investments related to artificial intelligence are contributing to rapid increases in technology-related prices, while prices across many goods and services continue to remain elevated.

Taiwan's Taiex index also faced a downturn, slipping by 0.9%.

On Wall Street, the S&P 500 index fell by 0.5% on Monday after initially gaining 1.1% earlier in the session. The Dow Jones Industrial Average, however, managed to rise by 0.4%, while the Nasdaq composite saw a decline of 1.1%. This mixed performance came despite the majority of stocks within the S&P 500 recording gains, buoyed by a recent drop of 7.6% in Brent crude oil prices, which closed at $104.77. The volatility in oil prices continues amid uncertainty surrounding the duration of the conflict with Iran and its impact on the global oil market.

Oil prices have fluctuated between approximately $70 and $120 per barrel since the onset of the conflict with Iran, often reversing direction swiftly. Similarly, stocks in the artificial intelligence sector have faced instability, as concerns grow over whether the significant investments by major tech companies in AI data centers will translate into sufficient productivity and profits to justify the expenses.

Recent earnings reports from Alphabet and other leading tech firms have indicated that AI developments may be straining their business operations. Google's parent company reported a significant cash burn during the last quarter, as reflected in its free cash flow metrics, and it experienced slower-than-anticipated growth in its search segment.