Asian markets fluctuate as AI sector fears and US-Iran tensions drive volatility, with precious metals rebounding after a sharp two-day collapse
HONG KONG: Stocks in Asia swung between gains and losses on Wednesday following another technology-led sell-off on Wall Street.
The volatility came as precious metals extended their recovery from a sharp two-day collapse, with investors buying the dip.
Oil prices also climbed around 1% amid renewed US-Iran tensions after a US fighter jet shot down an Iranian drone.
Markets globally have faced a turbulent start to February, driven by a stronger US dollar, geopolitical risks, and fears of a US government shutdown.
Concerns over an artificial intelligence bubble have added to the unease, with traders questioning vast sector investments.
The latest trigger was news that AI startup Anthropic revealed a tool for firms to conduct legal work.
This announcement hit software, financial services, and asset management stocks, while downbeat sales from Advanced Micro Devices worsened sentiment.
Asian tech shares fell, though broader indices were mixed. Shanghai, Sydney, Seoul, Singapore, and Manila rose, while Tokyo, Hong Kong, Jakarta, and Wellington fell.
The mixed performance suggested some stability returning after two days of sharp swings.
Those swings were sparked by AI worries and Donald Trump’s hawkish pick for Federal Reserve chair, which dampened rate cut hopes.
Precious metals rose for a second day after crashing late last week. Gold held above $5,000 an ounce and silver around $87, both well below recent record highs.
“Investors and traders are dipping their toes in the waters after the clear-out of a lot of the froth and leveraged speculative positions,” said Saxo Markets’ Neil Wilson.
Oil’s gains followed a US-Iran clash in the Strait of Hormuz, where Iranian forces also attempted to detain a US-flagged tanker.
The incidents occurred despite planned nuclear talks between Washington and Tehran later this week.
Traders found some relief after Trump signed a spending bill to avert an immediate government shutdown.
Lawmakers now have two weeks to negotiate a full-year funding bill for the Department of Homeland Security.
