Zürcher Nachrichten - Asian stocks mixed amid AI concerns, oil dips after surge

The outlook for artificial intelligence has provided a fresh boost to the tech sector in recent weeks, with some optimism for the upcoming earnings season. Chip titan Nvidia this week hit a record high and closed in on the $6 trillion market capitalisation.

That was dealt a blow by a Financial Times report saying OpenAI, the maker of ChatGPT, expected to make $50 billion in annualised revenue this year, far less than the $70 billion flagged previously.

"For most of this boom, the market has been happy to follow the money going in. Bigger data centres, more GPUs, more memory, more power, more debt, more capex," wrote Stephen Innes at SPI Asset Management.

"Every fresh spending commitment became another brick in the bullish wall because the assumption underneath it was simple enough: if the industry is prepared to spend this much, the demand will eventually justify it.

"Then OpenAI handed the market a number that made traders look at the other side of the ledger."

Wall Street's Nasdaq ended more than one percent lower, with Nvidia down nearly three percent, while Microsoft, AMD and Amazon among others sharply lower.

However, Chris Weston at Pepperstone added that "the discrepancy may reflect differences in revenue measurement rather than an outright deterioration in OpenAI's underlying business".

Still, he said, "in a market where valuations are increasingly dependent on ambitious revenue and cash flow projections, the headlines have been enough to trigger a meaningful one-day repositioning".

In Asia, Tokyo sank with tech investing titan SoftBank losing more than four percent, while Kioxia and Advantest were also well down.

Shanghai and Singapore were also down, though Hong Kong, Sydney, Wellington, Manila and Jakarta were all up.

Seoul and Taipei -- both heavily weighted with tech firms -- were closed for holidays.

Traders took a little heart from a dip in oil prices after US President Donald Trump ruled out hitting Iran before the midterm elections, saying Washington was holding "productive discussions" with Tehran.

His remarks came after reports said the White House had asked the Pentagon to draw up plans for a possible attack ahead of the November 3 vote, hoping a show of strength might help struggling Republicans' chances.

Both main contracts were down around 0.7 percent Friday, though that is after they fell as much as four percent on concerns about increased Iranian strikes in the Strait of Hormuz.

That comes on top of Yemen's Houthis taking aim at Riyadh airport with missiles and warning staff at oil facilities in Saudi Arabia to leave to avoid being targeted as hostilities escalate.

Comments from Fed officials cemented expectations for another interest rate hike before the end of the year, though this month appears unlikely.

Governor Christopher Waller said more tightening was likely necessary to bring prices under control, while St. Louis Fed boss Alberto Musalem eyed increases over the next six to nine months.

Still, National Australia Bank's Ken Crompton said: "Whilst this is a touch hawkish relative to his (Waller's) recent record, he's still in close accord with (Vice Chair Philip) Jefferson and (New York Fed chief John) Williams last week, who collectively (in addition to the inflation data) helped cool market pricing of an October hike from 15 basis points to less than five basis points."

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: DOWN 0.8 percent at 68,512.30 (break)

Hong Kong - Hang Seng Index: UP 1.2 percent at 24,059.76

Shanghai - Composite: DOWN 1.2 percent at 3,767.83

West Texas Intermediate: DOWN 0.7 percent at $90.89 per barrel

Brent North Sea Crude: DOWN 0.7 percent at $103.53 per barrel

Euro/dollar: UP at $1.1222 from $1.1213 on Thursday

Pound/dollar: UP at $1.3241 from $1.3228

Dollar/yen: DOWN at 157.89 yen from 157.92 yen

Euro/pound: DOWN at 84.75 pence from 84.77 pence

New York - Dow: UP 0.1 percent at 51,231.64 (close)

London - FTSE 100: DOWN 0.2 percent at 10,441.60 (close)

L.Rossi--NZN