Asian stocks trade mixed, AI stocks and oil prices in focus

Asian equities traded mixed on Tuesday as traders considered Middle East tensions and calls for a slowdown in AI development. Crude oil prices continued to rise, fueling concerns about inflation and prompting bets on a US Federal Reserve interest rate hike. Australian government bonds opened lower, with the S&P/ASX 200 falling 0.75% to 8,685.

Analysts noted that high energy prices could exacerbate inflationary pressures, potentially leading to higher interest rates. The AI industry's leaders warned of the need to slow down development to avoid catastrophic harm, though the possibility of a coordinated slowdown remained uncertain due to intense competition among U.S. firms and between the U.S. and China.

In contrast, markets in South Korea and India showed slight gains, with the KOSPI and Nifty50 both up by 0.04% and 0.27%, respectively. Taiwan's Taiex fell 0.27% to 45,735, while China and Hong Kong's stock markets experienced a decline, with the Shanghai Composite decreasing by 0.10% to 3,881 and the Hong Kong Stock Exchange slipping 0.23% to 24,860.

Japan's Nikkei 225 rose 0.36% to 63,715. The Bank of Japan is expected to raise its policy rate to 1.25% from 1.0% on Friday, as policymakers grow concerned about inflation exceeding its 2% target.