HK stocks rise as Nikkei, Kospi rally from AI selloff

Asian markets experienced a mixed day on Wednesday, with some sectors finding relief after a dip related to artificial intelligence, while broader gains were dampened by high oil prices and caution ahead of US inflation data. In Hong Kong, the Hang Seng Index started the day down 62 points, or 0.26%, at 24,282 but reversed course in early trading.

The tech index opened just under a point lower at 4,135, while the China Enterprises Index fell 12 points to 8,161 before turning positive. Mainland China's Shanghai Composite Index opened 10 points, or 0.27%, lower at 3,790. On the mainland's Shenzhen Component Index, the value dropped 45 points, or 0.36%, to 12,308. The ChiNext Index saw a decline of 15 points, or 0.52%, to 2,943.

Among firms connected to the AI supply chain, chipmakers Samsung Electronics and SK Hynix in South Korea climbed more than 2% in value, while Kioxia in Japan remained steady, recovering from previous session losses. MSCI's Asia-Pacific index outside Japan saw a 0.5% increase after US stocks ended the previous day with a slight loss.

In Tokyo, the Nikkei increased 0.6% to 68,193 by midday, and the Kospi in Seoul also rose. Despite the gains, sentiment remained cautious due to elevated oil prices and anxiety over energy supplies following Houthi missile and drone attacks on Saudi Arabia. US crude jumped 0.8% to $94.96 a barrel, while Brent crude rose to $106.60.

Analyst Kyle Rodda of Capital.com noted that market participants will be watching to see if the volatility across major indices subsides following yesterday's chip-led sell-off in the region. The geopolitical situation globally and its impact on energy markets were also likely to weigh on sentiment, Rodda added. Longer-dated bonds rallied as investors sought safety, with the yield on 10-year Treasury notes holding steady at 5.221 percent after falling to its lowest in nearly two weeks, and the yield on 30-year notes remained at 5.569 percent after a three-day decline.