GLOBAL MARKETS: Asian stocks wobble after tech-led selloff, volatility risk highlighted

TOKYO — Asian stocks traded unevenly on Wednesday following a global selloff in technology and semiconductor shares, as analysts warned of continued market volatility.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 0.02%. South Korea’s KOSPI (.KS11), which plunged 10% on Tuesday in its sharpest one-day drop since March, rebounded 2.2%. Japan’s Nikkei 225 (.N225) fluctuated between gains and losses and was last down 0.8%.

“Price action in markets over the last seven trading days has been alarming, not just when it falls, but also when it rises,” said Michael McCarthy, a market analyst at Moomoo Securities Australia. “When markets move so rapidly in either direction, it’s a sign of instability.”

Risk-off sentiment spread across Wall Street overnight, mirroring losses in Europe and Asia. U.S. equities declined on concerns over rising debt-funded artificial intelligence spending and speculation that the Federal Reserve could adopt a more hawkish stance. Treasury yields fell as investors moved into government bonds for safety.

The Dow Jones Industrial Average (.DJI) slipped 0.09%, the S&P 500 (.SPX) dropped 1.4%, and the Nasdaq Composite (.IXIC) fell 2.2%. The yield on benchmark 10-year U.S. Treasury notes (US10YT=RR) declined 1.41 basis points to 4.493%.

Oil prices extended recent losses, trading near four-month lows after signs emerged that more oil tankers stranded in the Gulf since the start of the Iran conflict are preparing to pass through the Strait of Hormuz.

However, uncertainty remains over the durability of the ceasefire agreement. The United States and Iran have offered conflicting accounts of their peace deal, particularly on key issues such as nuclear inspections and control of the Strait of Hormuz.

In currency markets, the U.S. dollar’s strength continued to pressure the Japanese yen (JPY=), which hovered near 40-year lows at 161.57 per dollar, keeping traders alert to the risk of government intervention to stabilize the currency.

Minutes from the Bank of Japan’s policy meeting this month showed some board members supporting further interest rate hikes after the central bank raised its benchmark rate to a 31-year high of 1.00%.

The dollar index (DXY), which tracks the greenback against major currencies including the yen and euro, rose 0.02% to 101.43, staying near a one-year peak. The euro (EUR=) slipped 0.06% to $1.1375, while the British pound (GBP=) fell 0.08% to $1.3192.

Gold prices extended losses, with spot gold (XAU=) down 0.48% at $4,088.71 per ounce, as expectations of higher interest rates reduced demand for non-yielding assets.

In cryptocurrencies, bitcoin (BTC=) rose 0.84% to $62,914.94, while ether (ETH=) gained 0.43% to $1,669.35.

-Reporting by Satoshi Sugiyama; Editing by Lincoln Feast / Reuters