(Sharecast News) - Asia-Pacific markets closed mixed on Wednesday as investors monitored a renewed rise in oil prices and awaited the Federal Reserve's latest interest rate decision.
Fed funds futures were pricing in a nearly 70% chance that policymakers would leave rates unchanged at 3.5% to 3.75%, with attention also on new chair Kevin Warsh's press conference.
Technology shares remained under pressure after another weak session for US semiconductor stocks.
"Markets are dealing with a nasty combination of AI disappointment, Middle East escalation, and central-bank uncertainty," said Patrick Munnelly, market strategy partner at TickMill.
"The sharpest stress is in South Korea, where chip stocks are being punished as investors question whether AI capex can convert into earnings quickly enough.
"Oil is higher after renewed US-Iran conflict headlines, while the Fed's new communication regime under Warsh has left markets unusually unsure going into today's FOMC decision.
"The result is a risk tape with very little emotional support and even less policy hand-holding."
Markets close in mixed state as tech shares slide
Japan's Nikkei 225 fell 1.49% to 61,434.19, although the Topix edged up 0.26% to 3,974.03.
Screen Holdings plunged 17.25%, Kioxia Holdings dropped 13.85% and Murata Manufacturing lost 12.89%.
China's Shanghai Composite rose 0.4% to 3,828.47 and the Shenzhen Component gained 1.1% to 13,658.44.
Liuzhou Iron & Steel climbed 10.12%, Guizhou Chitianhua rose 10.1% and Beijing Sanyuan Foods gained 10.09%.
Hong Kong's Hang Seng Index advanced 1.96% to 25,807.92, led by Li Auto, up 9.9%, Xiaomi, which gained 8.95%, and Nongfu Spring, which rose 7.26%.
South Korea's Kospi 100 tumbled 6.27% to 6,926.30, with Korea Aerospace down 17.83%, Hyundai Electric Energy Systems falling 16.88% and Hanmi Pharm losing 14.02%.
The Korea Exchange triggered a circuit breaker on the benchmark Kospi for a second consecutive day after the index dropped 8%, halting trading for 20 minutes.
"Asian equities extended their selloff for a second day as investors continued to rotate away from chipmakers," Munnelly added.
"The Kospi fell as much as 9% after Tuesday's 11% drop, putting the index on course for a potentially record two-day decline.
"Even after a modest recovery from the lows, the tech-heavy index is now around 42% below its June peak, which makes this far more than a routine pullback."
Australia's S&P/ASX 200 climbed 1.01% to 9,038.60, as Temple & Webster Group gained 8.36%, Lovisa Holdings rose 7.88% and CSL advanced 7.15%.
Annual inflation unexpectedly eased to 3.8% in June from 4.0%, remaining above the Reserve Bank of Australia's 2% to 3% target range.
Goods inflation slowed to 3.5% from 4.2%, while services inflation accelerated to 4.0% from 3.7%.
Trimmed mean inflation came in at 3.6%, below expectations of 3.7%, while monthly CPI fell 0.1% against forecasts for a 0.2% rise.
"Australia provided one clear dovish counterpoint," Munnelly said.
"June CPI missed expectations at -0.1% month-on-month versus a consensus of +0.2%, while annual inflation came in at 3.8% year-on-year, a 0.2 percentage point undershoot.
"RBA pricing moved sharply - the roughly 8bps of implied tightening for August at the end of last week has fallen to less than one basis point, while year-end tightening expectations dropped from 22 basis points yesterday to around 13 points."
New Zealand's S&P/NZX 50 gained 0.83% to 13,976.67.
Serko rose 5.34%, EBOS Group added 4.58% and Pacific Edge advanced 4%.
Dollar mixed as oil prices rise
In currency markets, the dollar fell 0.1% against the yen to JPY 163.68, but rose 0.5% against the Australian dollar to AUD 1.4409 and gained 0.1% against the New Zealand dollar to NZD 1.7308.
Brent crude jumped 5.18% to $88.45 a barrel and West Texas Intermediate rose 4.71% to $82.99 after US Central Command said Iranian forces launched multiple ballistic missiles at US bases in the Middle East, all of which were intercepted.
Reporting by Josh White for Sharecast.com.
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