Most Asian stock markets declined on Thursday, pressured by renewed U.S. military strikes on Iran and climbing oil prices that reduced risk appetite, while lingering disappointment over Samsung Electronics' earnings weighed on South Korean equities. A rebound in some Japanese semiconductor suppliers helped cap the region-wide drop.
Wall Street closed mixed overnight after the Federal Reserve released minutes from its June meeting that underscored a cautious policy stance. The Nasdaq 100 Futures and S&P 500 Futures traded flat on Thursday, providing little directional impetus for Asian trading.
Samsung disappointment and semiconductor volatility
The latest selling episode followed a volatile week for semiconductor stocks. Profit-taking that began last week intensified through Tuesday after Samsung Electronics posted a 19-fold jump in quarterly operating profit that nonetheless fell short of investors' elevated expectations.
Japanese semiconductor suppliers staged a recovery after earlier losses, but the bounce in chip names was not sufficient to lift overall regional sentiment, as investors remained cautious about whether AI-related earnings can continue to validate high valuations.
South Korean equities continued to feel the impact. Samsung fell 2.5% on Thursday after tumbling nearly 7% in the previous session, while LG Innotek Co Ltd dropped more than 5%. By contrast, SK Hynix Inc rebounded 3.5% after media reports said demand for its planned $28 billion U.S. listing exceeded seven times the shares on offer.
Even with pockets of buying, the KOSPI declined nearly 1.8%, extending losses after officially entering bear-market territory this week, having fallen more than 20% from the record high reached last month.
Japan limits the regional slide
Japan stood out as the region's stronger market. The Nikkei 225 climbed about 1.5% while the TOPIX added 0.5%, bolstered by renewed demand for chip suppliers. Murata Mfg Co advanced nearly 5%, TDK Corp gained more than 2%, and Kioxia Holdings Corp rose as much as 11% after Bain Capital confirmed it had exited its investment in the flash-memory maker, marking the close of a very successful private equity deal in Japan.
Other markets and movements
- Australia's S&P/ASX 200 fell 0.8%.
- The Shanghai Composite lost 0.6% and the Shanghai Shenzhen CSI 300 declined 0.3%.
- Hong Kong's Hang Seng eased 0.7% as investors awaited China's June inflation data.
- Singapore's STI rose 0.7%, supported by defensive buying.
- India's Nifty 50 Futures were modestly higher, up 0.2%.
Geopolitics, oil and the Fed keep investors cautious
Sentiment remained restrained after the United States launched another round of strikes targeting Iranian military infrastructure, saying the operations were intended to protect commercial shipping through the Strait of Hormuz after recent attacks on cargo vessels. Iran responded with fresh missile and drone strikes targeting U.S. military facilities in Kuwait and Bahrain. President Donald Trump said the temporary understanding with Tehran was effectively "over," though he later said he did not expect a broader war.
Higher oil prices added to concerns about inflation, even though crude remained well below peaks reached earlier in the conflict.
At the same time, the Federal Reserve's June meeting minutes showed policymakers were worried inflation risks could persist. Several officials highlighted potential drivers of continued price pressure - AI-driven demand, geopolitical tensions and tariffs - as factors that could warrant tighter policy if price pressures do not abate.
Investor guidance and upcoming data
OCBC Head of Wealth Advisory Chez Anbu said the long-term AI investment theme remains intact despite recent volatility, but investors are becoming more selective. He recommended diversification across semiconductors, AI infrastructure, software, automation and robotics, and suggested adding quality bonds to improve portfolio resilience amid ongoing geopolitical and inflation risks.
Looking ahead, investors were focused on China's June inflation data, Bank Negara Malaysia's policy decision later in the day, and next week's U.S. consumer price inflation report.
This article presents market moves and participant commentary without projection beyond the facts reported.