EQUITIES: Asian Equities Down As AI- And Geopolitical Risks Rise

Asian equity indices have followed the US’ Friday move lower as the market became jittery over tech stocks. In addition, geopolitical risks rose sharply with a significant escalation of Middle East hostilities in a short time risking what the US and Iran have agreed and the negotiations themselves. Israel and Iran continue to exchange missile fire. US equity futures are slightly higher though.

• Israel struck military targets across Iran in retaliation for Iran targeting Israel earlier and following reports of more Iranian missiles heading towards Israel, an Iranian Petrochem plant was reportedly struck. Iran said after its first attack that it was the “beginning of a full week of continuous strikes”.
• The S&P e-mini is up 0.1% while the Nasdaq is +0.3% after the physical market fell 4.2% on Friday. Social media giant Meta’s announcement of an AI-related new share offering spooked the market.
• Weak AI/tech sentiment weighed on the Kospi which is down 6.5% while Taiwan’s TAIEX is 3.5% lower. The Nikkei is down 4%.
• The Kospi is off its lows due to a turn around in Samsung Electronics and SK Hynix helped by Nvidia’s announcement of increased cooperation in developing future AI chips.
• The Hang Seng is down 1.3% while China’s CSI 300 is -1.8%. China’s Moonshot AI startup is looking for an extra $2bn bringing the total requested funding to $30bn. There is increasing demand for its large language models and chatbot.
• The ASX was closed due to a holiday across most of Australia but the NZX50 is down 0.9% - outperforming most of APAC.