Asian Shares See Mixed Session as Chip Rally Offsets Oil-Linked Inflation Risks

Asian equities displayed a mixed performance on Wednesday, with semiconductor shares extending their advance on persistent enthusiasm for artificial intelligence, even as benchmark crude approached the $100 mark and escalating geopolitical frictions fueled anxieties over inflation and the trajectory of interest rates.

The positive tone in Asia persisted even after a lackluster session on Wall Street, where worries that AI might upend conventional software businesses had pressured technology names.

Semiconductor counters stood out, as the Philadelphia Semiconductor Index climbed 1.3%. During Asian hours, Nasdaq 100 futures gained 0.2% while S&P 500 futures remained essentially unchanged.

Market focus stays fixed on Friday's U.S. consumer-price-index report, which could shape bets on a Federal Reserve rate increase at the September 15-16 policy meeting. Traders now assign roughly a 60% probability to a 25-basis-point move.

Oil exacerbated those worries amid escalating conflict, after Iran-backed Houthi forces struck Saudi urban centers and U.S. military assets targeted Iranian tankers. Additionally, Tehran cautioned crews aboard tankers anchored near Kuwaiti and Bahraini terminals to evacuate, and signaled potential further strikes on Gulf energy installations.

Brent crude has surged more than 60% year-to-date and is approaching the $100 threshold for the first time since July.

Chipmakers Push Higher as AI Trade Holds Ground

South Korea's KOSPI advanced 1.5%, while Japan's Nikkei 225 added 0.14%. In contrast, Hong Kong's Hang Seng slipped 0.2%, and China's CSI 300 inched up 0.1%.

Among individual stocks, SK Hynix jumped 3.6% and Samsung Electronics rose 0.8%, while Kioxia gained 0.6% and TDK advanced 1.86%. Sony declined 0.74%, and Foxconn finished unchanged.

The strength in semiconductors stands in contrast to the softness seen in U.S. software equities, as OpenAI's GPT-6 Astra revived concerns that AI might disrupt entrenched software companies.

On Tuesday, Intel and Qualcomm posted sharp gains after reaching an agreement with Amazon to build tailor-made AI processors, underscoring the market's attention on spending for AI infrastructure.

South Korea's gross domestic product expanded 0.6% sequentially in the April-June period, surpassing the 0.2% projection, aided by robust semiconductor exports.

Japan's economy grew at an annualized pace of 1.4%, albeit missing forecasts, while real wages climbed 2.4% in July, reinforcing market expectations for a Bank of Japan rate increase next week.

China Inflation Picks Up on Higher Energy Costs

The Shanghai Composite edged up 0.2%, while Hong Kong-listed technology stocks traded unevenly. Baidu advanced 3.3% and Alibaba added 0.6%, whereas Meituan dropped 2.5%, Xiaomi lost 2.1%, and D.com declined 1.84%.

China's consumer price index increased 0.8% in August from a year earlier and 0.4% on a monthly basis, while the producer price index climbed 3.8%, fueled primarily by elevated energy and metal prices. Core consumer inflation was just 1%, highlighting persistently subdued domestic demand.

These figures follow a 25% surge in exports and a 28.2% jump in imports for August, with high-tech shipments up 42.9% over the first eight months—pointing to an increasingly heavy dependence on overseas demand and AI-linked goods.

Elsewhere, Australia's S&P/ASX 200 dipped 0.2% following a softening in consumer sentiment, while Singapore's Straits Times shed 0.6% and India's Nifty 50 retreated 0.5%.

Investors are also awaiting quarterly results from Oracle and Adobe on Thursday for signals regarding AI infrastructure investment and whether the technology is starting to undermine established software franchises.