Dubai Telegraph - Asia stocks up as chip stocks recover, oil eases

Tech stocks have fallen in recent trading sessions on ongoing fears that the artificial intelligence (AI) sector may be overbought, with chip shares leading the rout.

But on Monday US technology stocks advanced and this was mirrored in Asian trade on Tuesday, helping Japan's Nikkei rise 1.75 percent and the Kospi in Seoul 3.6 percent.

Stephen Innes of SPI Asset Management cautioned however that the rebound did not appear to be driven by "a decisive improvement in the AI fundamentals".

"Big Tech earnings now need to prove that AI revenues, margins and cash flow can justify the scale" of the huge investments in AI infrastructure, Innes said.

Tesla and Alphabet are due to release results this week, followed by Microsoft, Meta, Apple and Amazon next week.

Oil prices had risen Monday after fresh fighting over the weekend in which the United States announced three new US military fatalities and one service member missing in action.

Iran's Revolutionary Guards said on Tuesday they hit US military targets including air defence systems in Bahrain and Kuwait, state news agency IRNA reported.

Iran's Yemeni allies, the Houthi rebels, also said Monday they would blockade Saudi ports, putting at risk Riyadh's ability to bypass the Strait of Hormuz for some of its oil exports.

"In practice, we think even if there were disruptions it is unlikely to be sustained given the lack of capability right now by the Houthis to do so and also differentiate which are Saudi linked ships or not," said Michael Wan at MUFG.

"All-in from a market perspective we think it's still a reasonable base case that there is resolution in the conflict, even if things may get worse before it gets better," Wan said.

US President Donald Trump meanwhile signed orders to impose new 50-percent tariffs on many Canadian goods, claiming "discriminatory treatment" against American alcohol, automobile and dairy products.

Yields on British gilts rose on Monday after comments by new Prime Minister Andy Burnham about public finances worried bond investors.

In Asia, US Secretary of State Marco Rubio condemned "dangerous and aggressive actions" by China following a clash with the Philippine navy in the South China Sea, as he arrived for an ASEAN foreign ministers' meeting.

- Key figures around 0300 GMT -

West Texas Intermediate: DOWN 0.3 percent at $82.98 per barrel

Brent North Sea Crude: DOWN 0.63 percent at $88.59

Tokyo - Nikkei 225: UP 1.74 percent at 65,255.68

Hong Kong – Hang Seng Index: DOWN 0.16 percent at 25,104.03

Shanghai – Composite: UP 0.26 percent at 3,806.29

Pound/dollar: DOWN $1.3430 from $1.3438 on Tuesday

Euro/pound: FLAT at 84.95 pence

Euro/dollar: DOWN at $1.1409 from $1.1416

Dollar/yen: UP at 162.51 yen from 162.48 yen

Z.W.Varughese--DT