(Sharecast News) - Asia-Pacific markets closed mixed on Monday after a strong showing for technology stocks last week, as oil prices slipped and investors reassessed artificial intelligence-driven plays.
"AI is pausing, Korea is taking profits, the dollar is firmer, oil is losing its Hormuz premium, and the week's real macro signal sits less in today's data than in Wednesday's Fed minutes and tomorrow's BoE stability review," said Patrick Munnelly, market strategy partner at TickMill.
Focus was also on the minutes from the Federal Reserve's June meeting, due to be released later this week, as markets looked for further clues on the US central bank's policy outlook.
Munnelly said stocks had softened in Asia as the semiconductor rally lost momentum and investors took chips off the table after one of the strongest year-to-date runs anywhere in global equities.
"After a bruising rebound in tech last week, markets are starting Monday with a more selective tone: investors are not walking away from the AI story, but they are asking whether a sector priced for perfection can keep delivering perfection into earnings season," he said.
Oil prices edged lower, with Brent crude futures last down 0.47% on ICE at $71.78 per barrel, and the NYMEX quote for West Texas Intermediate falling 0.41% to $68.41.
"Oil is giving the macro tape some relief," Munnelly said.
"Brent eased as shipping through the US-protected corridor in the Strait of Hormuz continued to recover and OPEC+ approved a modest collective quota increase of 188,000 barrels per day from August."
Munnelly said that took the cumulative rise since April close to 800,000 barrels per day, while UK Maritime Trade Operations reported that 160 vessels, including 98 tankers, moved through the Strait between Monday and Saturday last week.
"That remains well below the pre-war daily average of 138 transits, but the direction is improving, and the market is treating Hormuz less like an active supply crisis than a fading risk premium," he said.
Asian markets mixed as Seoul pulls back
Japan's Nikkei 225 slipped 0.01% to 69,737.69, while the broader Topix rose 0.92% to 4,101.96.
Taiyo Yuden dropped 10.58%, Ibiden lost 8.37%, and Murata Manufacturing declined 7.49%.
In China, the Shanghai Composite edged down 0.06% to 4,041.24, while the Shenzhen Component fell 1.16% to 15,416.80.
Xi'an Bright Laser Tech dropped 10.75%, while Zhejiang Aokang Shoes and China Hi-Tech Group each lost just over 10%.
Hong Kong's Hang Seng Index rose 1.14% to 23,616.32.
Kuaishou Technology gained 7.98%, Sino Biopharmaceutical rose 6.54%, and J&T Global Express added 5.19%.
South Korea's Kospi 100 fell 0.64% to 10,141.57.
Hanmi Pharmaceutical dropped 8.34%, Samsung Electro-Mechanics lost 8.09%, and Hyosung Heavy Industries declined 6.2%.
Hanwha Ocean climbed 8.61% and Hanwha Systems rose 7.15%, however, buoyed by expectations of a Canadian submarine contract and investment in the space sector.
Hanwha Ocean advanced following reports that Canada would announce a submarine contract winner on Monday, with the company competing against a German-Norwegian partnership involving Thyssenkrupp Marine Systems for a deal to build 12 submarines for Canada's navy.
Hanwha Systems gained after reportedly unveiling a KRW 20trn investment plan in satellite technologies on Friday, as part of Hanwha Group's KRW 55trn investment in space and defence AI by 2040.
Munnelly said South Korea led the regional pullback, with the Kospi falling as Samsung Electronics and SK Hynix both traded lower.
"The move came despite reports that Seoul may explore an industry investment fund financed by surplus semiconductor tax revenues, a reminder that policy support can improve the long-term backdrop without immunising crowded trades from short-term profit-taking," he said.
Munnelly said the Korean wobble needed context, with the Kospi still up close to 90% this year, while Taiwan and Japan had gained around 62% and 37%, respectively.
"That kind of performance leaves markets vulnerable to any pause in momentum, particularly ahead of earnings season," he said.
"Samsung reports Tuesday and is expected to deliver an extraordinary profit rebound, with analysts looking for an 18-fold increase in operating profit to around KRW 86trn, according to LSEG SmartEstimate."
"The bar is therefore high," he added.
"A big number may not be enough if guidance, AI memory pricing or capex commentary fail to extend the story."
Sydney in the red, Wellington rises
Heading down under, Australia's S&P/ASX 200 slipped 0.15% to 8,831.00.
Genesis Minerals fell 4.13%, Austal lost 3.58%, and Ventia Services Group declined 3.41%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 rose 1.06% to 13,763.10.
Vista Group International gained 6.52%, A2 Milk Company rose 2.75%, and EBOS Group added 2.43%.
Dollar stronger against regional peers
In currencies, the dollar was last up 0.58% on the yen to trade at JPY 162.28, as it gained 0.14% against the Aussie to AUD 1.4429, and advanced 0.53% on the Kiwi to change hands at NZD 1.7603.
Reporting by Josh White for Sharecast.com.
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