Asian stocks mixed as chip rally offsets oil-fueled inflation concerns

Asian stocks exhibited a mixed performance on Wednesday, as semiconductor companies continued to rally on sustained optimism surrounding artificial intelligence, while crude oil prices edged closer to the $100 mark and heightened geopolitical tensions reignited concerns about inflation and interest rates.

The gains were evident despite a subdued Wall Street session on Tuesday, as worries that artificial intelligence could disrupt traditional software negatively impacted technology stocks. Semiconductor shares, however, managed to outperform, with the Philadelphia Semiconductor Index climbing by 1.3%. In Asian markets, the Nasdaq 100 Futures increased by 0.2%, while the S&P 500 Futures traded largely unchanged.

Attention remains fixed on Friday's U.S. Consumer Price Index (CPI) report, which may impact expectations for a Federal Reserve rate hike at its scheduled meeting on September 15-16. Market analysts currently calculate a 60% probability of a 25-basis-point increase.

The escalation in oil prices added to these concerns, as ongoing skirmishes intensified, with Iran-backed Houthis targeting Saudi cities, and U.S. forces striking Iranian tankers. Tehran subsequently warned tanker crews near Kuwaiti and Bahraini piers to abandon their vessels and threatened additional attacks on Gulf energy infrastructure. Brent crude prices have surged more than 60% this year and are nearing the $100 threshold for the first time since July.

South Korea's KOSPI index gained 1.5%, while Japan's Nikkei 225 index rose by 0.14%. However, Hong Kong's Hang Seng index slipped by 0.2%, and China's CSI 300 index increased by 0.1%. SK Hynix rose 3.6% and Samsung Electronics gained 0.8%, while Kioxia added 0.6%, and TDK climbed 1.86%. Conversely, Sony experienced a 0.74% decline, and Foxconn remained flat.

The bullish trend in semiconductor shares stands in stark contrast to the weakness observed in U.S. software shares. OpenAI's GPT-6 Astra has reignited fears that AI could disrupt established software businesses. Intel and Qualcomm, however, saw significant gains on Tuesday following their agreement with Amazon to develop custom AI chips, emphasizing the emphasis on AI infrastructure spending.

South Korea's economy expanded by 0.6% quarter-on-quarter in the second quarter, surpassing the 0.2% forecast, with semiconductor exports contributing to the growth. Japan's GDP expanded at an annualized rate of 1.4%, although it fell short of expectations. Real wages rose by 2.4% in July, suggesting a potential Bank of Japan (BOJ) rate hike next week.

The Shanghai Composite rose by 0.2%, while Hong Kong's technology shares experienced mixed results. Baidu gained 3.3%, and Alibaba increased by 0.6%, while Meituan fell by 2.5%, Xiaomi declined by 2.1%, and D.com rose by 1.84%. China's August CPI rose by 0.8% year-on-year and 0.4% month-on-month, with PPI climbing 3.8%. Higher energy and metal prices fueled the increase, although core CPI remained relatively subdued at just 1%.

This data comes in the wake of a sharp surge in exports, which grew by 25% in August, and imports, which rose by 28.2%. High-tech exports experienced a particularly robust growth of 42.9% during the first eight months, highlighting the economy's increasing dependence on external demand and AI-related products.

Elsewhere, Australia's S&P/ASX 200 fell by 0.2% after consumer sentiment weakened, while Singapore's Straits Times index declined by 0.6%, and India's Nifty 50 index dropped by 0.5%. Investors will also closely monitor Oracle and Adobe's earnings reports on Thursday, seeking insights into AI infrastructure spending and whether technology is beginning to disrupt traditional software businesses.