Asian shares fall as AI rally cools; oil steadies near $70

Asian equities retreated on Thursday after the previous session’s AI-driven rally lost momentum, with technology shares leading declines across the region. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.69%, South Korean stocks dropped 3.64% and Japan’s Nikkei lost 1.57%. Samsung Electronics fell 2.44%, SK Hynix lost 6.95%, Kioxia plunged 9.61% and Tokyo Electron slumped 4.61%. The weaker tone followed an overnight pullback on Wall Street, where the Nasdaq ended a multi-day winning streak after quarterly earnings from SpaceX and Advanced Micro Devices failed to sustain investor enthusiasm despite signs of strong AI-related spending returns and an earnings beat from AMD. Oil traded in a narrow band, with Brent crude down 0.18% at $79.31 a barrel and U.S. West Texas Intermediate down 0.35% at $74.96, as investors assessed prospects for a proposed Iran-Oman agreement that could help end five months of war between Iran and the United States and reopen the Strait of Hormuz. A senior Iranian source and two regional officials told Reuters the proposal would give Tehran control over ships entering the Gulf through the strait. Markets also shifted focus to U.S. labour data before Friday’s nonfarm payrolls report. ADP data showed private employers added 44,000 jobs last month, slowing from 95,000 in June and missing expectations by about 25,000. Economists polled by Reuters expect July payrolls to show an 80,000 increase after June’s 57,000 gain, with unemployment holding at 4.2%. Futures markets priced in about a 54% chance of a Federal Reserve rate hike in September, down from 58% a day earlier, while the U.S. 10-year Treasury yield fell 1.04 basis points to 4.607%. In currencies, the dollar was steady at 157.66 yen after a rare joint yen-buying intervention by Japan and the United States last week. Spot gold rose 1.06% to $4,290.26 an ounce and spot silver gained 0.65% to $62.48.