Asian stocks were on shaky ground on Wednesday, following steep losses in U.S. and European equities on fears that advancements in artificial intelligence could supplant traditional software.
Oil prices climbed after the U.S. shot down an Iranian drone and armed boats approached a U.S.-flagged vessel in a key waterway, while precious metals found a firmer footing after a recent rout.
A selloff among U.S. and European data analytics, professional services and software companies deepened after Anthropic's launch of plug-ins for its Claude Cowork agent on Friday sparked worries of an AI-fuelled disruption to those industries.
While shares of some related companies slid in Asia, the overall selling pressure was less acute, given the region's historical dominance in hardware manufacturing. China's CSI Software Services Index (.CSI930601), opens new tab fell 3%, while technology giants listed in Hong Kong (.HSTECH), opens new tab lost 1.8%.
In Japan, advertising giant Dentsu's stock price (4324.T), opens new tab slumped more than 6%. Shares of Nomura Research Institute (4307.T), opens new tab tumbled nearly 8%. The Nikkei (.N225), opens new tab eased 0.8%, though MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab remained 0.1% stronger.
Nasdaq futures slipped 0.12% after losing more than 1% in the cash session overnight, while S&P 500 futures were little changed. EUROSTOXX 50 futures dipped 0.1%. FTSE futures were up 0.08%.
"The AI trade is splitting between relative winners and losers," said Ben Bennett, head of investment strategy for Asia at L&G Asset Management. "We saw that last week after Microsoft fell despite decent results on fears of disruption to its software business. And that software wobble has continued this week. So it's not simply that the tech sector is a universal winner - it's going to have some weak areas too."
South Korea's technology-heavy KOSPI (.KS11), opens new tab rose 1.4%, while stocks in Taiwan (.TWII), opens new tab were up 0.2%.
In the oil market, Brent crude futures rose 0.77% to $67.85 a barrel while U.S. crude advanced 0.97% to $63.82 per barrel as recent events stoked concerns that talks aimed at de-escalating U.S.-Iran tensions could be disrupted.
The U.S. military said on Tuesday it shot down an Iranian drone that "aggressively" approached the Abraham Lincoln aircraft carrier in the Arabian Sea.
A group of Iranian gunboats also approached a U.S.-flagged tanker in the Strait of Hormuz north of Oman, maritime sources and a security consultancy said. OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia.
Precious metals were meanwhile recovering from a rout. Spot gold reclaimed the $5,000 level and was up 2.8% at $5,076.29 an ounce, while silver rose more than 3% to $87.79 an ounce.
The meltdown came after U.S. President Donald Trump announced Kevin Warsh as his pick to lead the Federal Reserve, while a margin hike by CME (CME.O), opens new tab exacerbated the selling. Warsh is expected to shrink the Fed's balance sheet, which usually hurts non-yielding precious metals.
"We expect elevated volatility to continue in the near term, but stabilization should return once the market finds its footing," said Joshua Chim, general manager of online broker FSMone.
