Asia stocks fall as surging oil, yields weigh; Samsung slips despite record profit

Asian stocks experienced a broad decline on Thursday as soaring oil prices and elevated U.S. Treasury yields dampened risk appetite. South Korea's Samsung Electronics underperformed despite reporting its strongest quarterly profit ever. The market followed a softer Wall Street session that ended a four-day winning streak for the Dow and S&P 500, as well as a five-day run for the Nasdaq.

U.S. stock futures were virtually unchanged by 03:50 GMT on Thursday. The South Korean KOSPI dropped nearly 2%, with Samsung Electronics shares falling more than 1%. The company's shares continued to fall even after Samsung Electronics forecasted a third-quarter operating profit of 107.4 trillion won ($80.2 billion), up 782.5% year-over-year, despite missing Bloomberg forecasts of 108.67 trillion won.

The record profit was a first for a technology company, driven by robust demand for memory chips used in artificial intelligence applications. Investors were more concerned about the sustainability of the semiconductor boom, as Samsung's shares had already surged strongly this year. Oil prices contributed to the equity pressure, with Brent crude rising 2% above $102 a barrel amid concerns over Middle East supply disruptions, including tensions around the Strait of Hormuz.

The Pentagon instructed the U.S. military to prepare for potential major combat operations in Iran. U.S. Treasury yields remained near multi-decade highs, with the 10-year yield briefly reaching 5.36%, its highest since 2002, before a robust Treasury auction slightly reduced the rate. Elevated yields increased the opportunity cost of holding equities, particularly affecting technology stocks.

Japan's Nikkei 225 fell 1.1%, while the broader TOPIX index slipped 1.4%. China's Shanghai Composite saw a 0.3% decrease, and the blue-chip Shanghai Shenzhen CSI 300 index declined 0.4%. Hong Kong's Hang Seng market declined nearly 1%, and the Hang Seng TECH sub-index fell 2%. Other Asian markets also declined, with Australia's S&P/ASX 200 dropping 0.7% and India's Nifty 50 falling 0.5%.

The Singapore FTSE Straits Times index slipped more than 3%. Investors also considered Federal Reserve minutes, which indicated a roughly 19% chance of an interest rate hike by year-end, although officials noted they would remain data-dependent.