Japan’s Nikkei 225 eased 0.21 percent, while South Korea’s Kospi dipped 0.23 percent
Asian stock markets reversed early gains on Thursday, pressured by a Wall Street downturn after stronger-than-expected U.S. inflation data and fresh U.S. military strikes on Iran fueled concerns over rising oil prices.
On Thursday, Wall Street futures pointed higher, with S&P 500 futures rising 0.38 percent after the index closed 1.6 percent lower, and Nasdaq futures gaining 0.68 percent after tumbling 2 percent in the previous session. The decline came after data showed U.S. inflation accelerated in May at its fastest annual pace since April 2023. While the reading matched market expectations, it reinforced concerns that price pressures remain persistent.
Kospi pares some losses on SK Hynix recovery
In the Asian stock market, MSCI’s broad Asia-Pacific index outside Japan dropped 0.46 percent, while Taiwan’s benchmark index gained 2.76 percent. Japan’s Nikkei 225 eased 0.21 percent, while South Korea’s Kospi dipped 0.23 percent. The Kospi, which had fallen as much as 4 percent earlier in the session, pared some of its losses as heavyweight memory chipmaker SK Hynix recovered after reports that the company plans to triple its wafer production capacity.
Semiconductor stocks have been among the biggest drags on technology shares this week, as investors took profits following a strong artificial intelligence-driven rally in May. The AI-fueled surge lost momentum in June amid growing concerns over whether companies can generate sufficient long-term returns to justify massive investments in the sector.
Adding to those concerns, reports on Wednesday said OpenAI is considering significant price cuts for its products as competition from rival Anthropic intensifies. The move could further pressure revenues at a company that remains heavily loss-making.
Hong Kong’s Hang Seng Index underperformed regional peers, declining 1.23 percent. The benchmark was weighed down by losses in major technology stocks, with Alibaba Group falling nearly 6 percent amid renewed concerns about its artificial intelligence growth prospects.
JD.com also dropped over 4 percent after local media reports indicated the e-commerce giant was facing regulatory scrutiny over allegations of misleading advertising.
Investors eye U.S.-Iran resolution as sentiment remains cautious
Broader Asian stock markets regained some footing on Thursday after suffering steep losses in recent sessions, although investor sentiment remained fragile amid ongoing tensions between the United States and Iran. Washington said it had carried out strikes on several Iranian military targets, prompting retaliatory attacks by Tehran against U.S. bases and allies.
However, markets found some relief after the U.S. military indicated that its latest round of strikes had concluded, fueling hopes that the conflict may not escalate further.
Investors also continued to monitor prospects for a potential diplomatic resolution between the two countries, even as President Donald Trump warned that further military action against Iran remained a possibility.
Read: Gold prices rebound from six-month low to $4,079.88 as investors eye key U.S. inflation report
European futures fall ahead of central bank meeting
In early European trading, sentiment remained cautious, with pan-European futures falling 0.8 percent, while Germany’s DAX futures declined 0.11 percent and FTSE futures slipped 0.35 percent.
In currency markets, the euro edged up 0.07 percent to $1.1545 ahead of the European Central Bank’s policy meeting later in the day, where policymakers are widely expected to raise interest rates.
The U.S. dollar index, which tracks the greenback against a basket of six major currencies, rose to 99.99, remaining within the narrow range it has traded in over the past week. Demand for safe-haven assets has helped support the dollar, keeping it near its strongest levels since the United States and Iran began ceasefire negotiations in early April.
Meanwhile, expectations for the Federal Reserve’s next interest-rate move shifted slightly toward an earlier hike. Fed funds futures now imply a 51.6 percent probability of a rate increase at the Fed’s October 28 meeting, up from 50.1 percent a day earlier, according to CME Group’s FedWatch tool, highlighting how finely balanced market expectations remain.