Asian stocks wobble, oil weighs

KOSPI was the worst performer in Asia, down as much as 3%

Asian stocks moved in a flat-to-low range on Thursday as markets parsed mixed signals on a potential de-escalation in the U.S.-Israel war on Iran, with a rebound in oil prices also lending pressure.

KOSPI was the worst performer in Asia, down as much as 3%.

The KOSPI was also hit by outsized losses in memory chip stocks.

Samsung Electronics Co Ltd and SK Hynix Inc slipped nearly 4% and 5%, respectively, and were among the biggest weights on the KOSPI.

The two tracked overnight losses in their U.S. peers after Google researchers unveiled “TurboQuant,” a new compression algorithm that could greatly lower the memory requirements of large language models.

Mass adoption of the tech could in turn hurt AI-fuelled demand for advanced memory chips. Samsung and SK Hynix have benefited greatly from a memory supply shortage due to AI in recent quarters, as a supply squeeze ramped up their selling prices and margins.

ASX 200 dropped 0.2%, while Shanghai Shenzhen CSI 300 and Shanghai Composite indexes declined nearly 0.3% each. Hang Seng dropped 1.4%.

Straits Times index was a mild outperformer, adding 0.4%.

Nikkei 225 and TOPIX indexes slipped 0.2% and 0.6%, reversing initial gains.

Media reports showed Japan had begun releasing oil from its national emergency reserves to help offset supply disruptions stemming from the Iran war.

Prime Minister Sanae Takaichi said earlier this week that Tokyo will release about 80 million barrels of stockpiled oil to refiners.

The release comes amid similar moves by several other countries to help temper energy supply shocks from the Iran war.

Markets were nursing weeks of losses amid persistent concerns over the economic effects of the war. Several countries in Asia are also seen as highly vulnerable to disruptions in energy markets, due to their heavy dependence on imports.