Asian stocks open lower as US chip selloff deepens and oil slides on Iran hopes
Asia Pacific shares fell 0.4% and Kospi lost almost 3% after US chipmakers extended a three-day rout to 12%. WTI crude stood at 96.73 as hopes for Iran diplomacy weighed on oil.
- 01The MSCI Asia Pacific gauge fell 0.4% at the open, while South Korea's Kospi lost almost 3%
- 02A gauge of US chipmakers extended a three-day rout to 12%
- 03The Nasdaq 100 stands 10% below its peak, a technical correction
- 04WTI crude stands at 96.73, up 0.28% from the previous close of 96.46
Asian equities opened lower on Tuesday as a selloff in US semiconductor shares deepened. The regional MSCI index lost 0.4%, and the Korean benchmark fell by close to 3%.
What happened
In the US, a gauge of chipmakers extended a three-day rout to 12%. The Nasdaq 100 now sits 10% below its peak, which meets the definition of a technical correction.
The chip slide overshadowed a sharp drop in oil prices. Crude fell on optimism over diplomatic progress toward ending the war in Iran.
Crude oil (WTI) stood at 96.73, up 0.28% from the previous close of 96.46, in the latest quote. US equity futures rose, which one source described as a sign of renewed demand for shares after the weakness.
Why it matters
South Korea's market is closely tied to the semiconductor industry, so the Kospi decline of almost 3% shows how the US chip rout spread across the region. A 12% fall in three sessions in one sector is a sharp move. It pulled the broader Nasdaq 100 into correction territory, defined here as a 10% drop from its peak.
Oil is the other side of the picture. Hopes for a diplomatic path to end the war in Iran pushed crude lower during the session. Even so, WTI remained near 96.73, so energy costs are still a factor for companies and consumers.
For investors, the session shows two forces pulling in different directions: pressure on technology shares and easing geopolitical risk in energy markets.
What to watch next
The US calendar is busy. Midterm Elections take place in the US on Tuesday, and markets will react once the vote is under way.
At 15:00 UTC on Tuesday, the US releases JOLTs Job Openings for September. The estimate is 7.13 M, and the previous reading was 7.08 M. The report will give a fresh view of labor demand in the world's largest economy.
Markets will also follow whether the rebound in US futures holds once Wall Street trading resumes, and whether the chip rout continues or pauses. Further news on the diplomatic efforts over Iran may keep moving oil prices, which remain close to 97 per barrel.
Sources:UCapital Markets (ucapital.com)bloomberg.comeconomictimes.indiatimes.com
UCapital24 S.p.A. or group companies may have commercial relationships with the companies mentioned. This content is not financial advice.
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