(Sharecast News) - Asia-Pacific markets closed mixed on Wednesday as investors assessed whether a rebound in technology shares on Wall Street could stabilise sentiment after the recent sell-off.
"Markets are no longer trading only the peace dividend," said Patrick Munnelly, market strategy partner at TickMill.
"Oil below $76 per barrel is a major macro relief, and normalising Hormuz traffic should help headline inflation.
"But AI positioning is crowded, semiconductors are wobbling, and Micron's earnings now serve as a crucial test of whether the chip rally still has fundamental backing."
Focus was also on Micron Technology, which is due to report earnings after the closing bell in New York.
Analysts polled by FactSet expect earnings of $20.83 per share on revenue of $35.75bn.
Munnelly said global markets were still struggling to stabilise after Tuesday's AI-led sell-off, with investors reluctant to rebuild risk before Micron's results.
"The report has become a key near-term test for semiconductor sentiment, particularly for demand linked to AI memory chips," he said.
"The MSCI All Country World Index slipped 0.1%, while Asia's main equity index fell 0.4%, reversing an earlier gain of almost 1%."
Munnelly said the pressure remained concentrated in semiconductors, with South Korea's Kospi attempting to rebound after a historic sell-off but remaining vulnerable after a rapid unwinding of leveraged positions in chipmakers and AI-linked stocks.
"Micron's commentary on long-term supply agreements, pricing power and upfront customer payments will therefore carry more weight than usual," he said.
"The key question is whether AI remains in a boom phase or whether investors have pulled forward too much future optimism."
Oil extended losses during Asian trading as concerns over potential supply disruptions eased, while investors continued to monitor developments in the Strait of Hormuz.
US president Donald Trump criticised oil companies for not lowering gasoline prices in line with the recent drop in crude.
"In other words, customers are being 'gouged.' I have instructed the DOJ to immediately start looking into this. Gasoline prices better start going down a lot faster than what I'm seeing!" he wrote in a Truth Social post.
Brent crude futures were last down 1.7% on ICE at $75.77 per barrel, while the NYMEX quote for West Texas Intermediate lost 1.69% to $71.97.
"Oil continues to provide macro relief," Munnelly said.
"Brent briefly fell below $76 per barrel overnight, leaving it only around 4% above its immediate pre-conflict intraday high.
"The market is steadily unwinding the Middle East geopolitical risk premium as tanker traffic through the Strait of Hormuz returns toward normal following the provisional US-Iran peace deal."
Bourses mostly higher across Asia, Tokyo in the red
Japan's Nikkei 225 fell 0.88% to 69,174.97, while the broader Topix declined 0.67% to 3,963.76.
T&D Holdings dropped 5.74%, Daiichi Life Group lost 4.64%, and Nippon Express Holdings fell 4.5%.
In China, the Shanghai Composite edged up 0.11% to 4,110.81, while the Shenzhen Component rose 1.24% to 16,051.32.
Huaan Securities and Zhejiang Aokang Shoes each gained 10.04%, while Jinzhou Jixiang Molybdenum added 10.02%.
Hong Kong's Hang Seng Index advanced 0.33% to 23,412.18.
SMIC jumped 8.93%, WuXi AppTec rose 8.33%, and WuXi Biologics gained 4.17%.
South Korea's Kospi 100 rose 3.38% to 10,755.88, supported by gains in Samsung-linked stocks.
Samsung Epis Holdings climbed 11.23%, Samsung Electronics rose 9.84%, and Samsung Biologics added 8.8%.
Munnelly said most long-only investors still saw AI as a secular capital expenditure cycle rather than a bubble peak, but short-term positioning remained a problem.
"Crowded trades do not need a fundamental collapse to correct; they only need earnings guidance that is less spectacular than expected," he said.
"Micron therefore becomes a sentiment checkpoint for the entire memory and AI hardware chain."
Sydney in the green as inflation comes in hot
Heading down under, Australia's S&P/ASX 200 gained 0.24% to 8,808.40.
Wisetech Global surged 14.26%, Xero rose 8.17%, and Telix Pharmaceuticals gained 8.04%.
Australia's annual inflation rate unexpectedly slowed to 4.0% in May from 4.2% in April, coming in below expectations for 4.4%, but remaining above the Reserve Bank of Australia's 2% to 3% target range.
It was the softest increase since February, as goods inflation eased to 4.2% from 4.7%.
Transport costs rose at their slowest pace in three months, increasing 3.3% compared with 6.6% in April, while automotive fuel prices rose 7.7%, down from 18.6%.
On a monthly basis, consumer prices fell 0.7%, the first decline since August 2025 and a steeper drop than the 0.3% expected by markets.
"Australia's May CPI data are a useful reminder of that distinction," Munnelly said.
"Headline inflation of 4.0% year-on-year was weaker than expected, but the trimmed mean at 3.6% year-on-year was an upside surprise."
Across the Tasman Sea, New Zealand's S&P/NZX 50 slipped 0.26% to 13,400.66.
Spark New Zealand fell 2.75%, Oceania Healthcare lost 2.56%, and Meridian Energy declined 2.5%.
Dollar makes gains on regional peers
In currencies, the dollar was last up 0.11% on the yen to trade at JPY 161.73, as it gained 0.43% against the Aussie to AUD 1.4519, and advanced 0.54% on the Kiwi to change hands at NZD 1.7736.
Reporting by Josh White for Sharecast.com.
32.78 (0.31%)
0.00