Asia shares edge up as chip selloff eases; US CPI awaited

Hong Kong, Oct 14: Asian shares saw a slight increase on Wednesday as the sector related to artificial intelligence (AI) found some relief, but gains were curtailed by high oil prices and uncertainty surrounding U.S. inflation data. Among AI-related firms, chipmakers Samsung Electronics and SK Hynix in South Korea climbed over 2 percent, while Kioxia in Japan remained stable, reversing some losses from the previous day.

The MSCI's Asia-Pacific index, excluding Japan, gained 0.5 percent after U.S. stocks closed the previous session with a minor decline. Japan's Nikkei and South Korea's Kospi both rose by 0.2 percent and 1.8 percent respectively. However, caution lingered as oil prices remained high due to fears of energy supply disruptions after Houthi missile and drone attacks on Saudi Arabia.

Analyst Kyle Rodda at Capital.com noted that global geopolitical tensions and their impact on energy markets were also influencing sentiment.

Investors were also keeping a close eye on U.S. inflation data, which will provide insights into the Federal Reserve's interest-rate policy. Economists anticipate headline inflation to climb to an annual 3.6 percent in September, primarily due to rising energy costs, with the core CPI (excluding food and energy) increasing by 0.2 percent month-over-month.

The risk lies in the possibility of a core CPI surprise, which could prompt a potential October Federal Reserve rate hike and strengthen the U.S. dollar. Currency strategist Carol Kong at Commonwealth Bank of Australia indicated a 22 percent probability of an October rate hike based on current market expectations.

The S&P 500 futures were up by 0.04 percent at 7,858.8, while the U.S. dollar index (DXY) dropped to 102.17, and the euro held steady at $1.1202. Market participants were also eagerly anticipating China's inflation data, which could offer clues about the resurgence of domestic demand amid deflationary pressures.