BEIJING (dpa-AFX) - Asian stocks retreated on Thursday, with AI and semiconductor stocks coming under heavy selling pressure on concerns about the sustainability of the artificial-intelligence trade.
After U.S. CPI data surprised to the upside, investors awaited the release of U.S. producer price inflation and retail sales data as well as speeches from Fed officials, including Chair Kevin Warsh later in the day for additional clues on the Fed's next move.
San Francisco Fed president Mary Daly signaled Wednesday that the U.S. central bank will likely need to raise short-term interest rates further to address inflation, adding there's no need to do so at the October 27-28 meeting.
Traders now see a nearly 35 percent chance the Fed will raise borrowing costs at its next meeting later this month, up from the 22 percent probability seen a day earlier, according to the CME FedWatch tool.
The U.S. dollar slipped from an 18-month high, while gold prices rose about 1 percent to $4,140 an ounce after touching a one-week low in the previous session.
Brent crude futures fell nearly 2 percent toward $104 a barrel due to profit taking following a recent rally as reports suggested the Trump administration is considering easing sanctions on so-called shadow fleet vessels in order to reduce record-high global freight rates.
However, supply concerns remain elevated after two commercial vessels were struck by unidentified projectiles while passing through the Strait of Hormuz on October 13 and 14, as reported by the Maritime and Port Authority of Singapore.
Yemen's Houthis vowed to press on with attacks on airports and oil facilities in Saudi Arabia after hitting the headquarters of the Saudi state-owned oil company Aramco a day earlier.
Elsewhere, Russia accused Ukraine of carrying out drone strikes on two oil refineries, including the 400,000-barrel-per-day Ryazan facility.
'We see no indication that the Ukrainian side is moving towards an energy ceasefire', Russian Deputy Prime Minister Alexander Novak said.
China's Shanghai Composite index tumbled 1.59 percent to 3,707.48, reaching its lowest level in more than a year as a sell-off in artificial intelligence-related supply chain shares intensified.
Hong Kong's Hang Seng index dropped 1.03 percent to 24,062.72, weighed down by tech shares on heighted concerns over further Federal Reserve rate hikes.
Japanese markets plummeted amid concerns over elevated oil prices and high valuations in technology shares. The Nikkei average slumped 4.90 percent to 64,425.95 while the broader Topix index settled 2.38 percent lower at 3,999.34.
Among the prominent decliners, Tokyo Electron, SoftBank Group, Kioxia Holdings and Advantest nosedived 8-15 percent.
Seoul stocks plunged on concerns about whether substantial AI investment would generate the expected returns. The Kospi index fell 7.57 percent to 5,554.22, extending losses for a seventh straight session.
Market bellwether Samsung Electronics plunged 9.5 percent and its chip rival SK Hynix nosedived 11 percent. Trading on both of South Korea's stock markets was halted earlier in the day after the Kospi and Kosdaq fell more than 8 percent.
Australian stocks ended off their day's lows after unemployment unexpectedly fell in September, helping ease fears of further interest rate rises. The benchmark S&P/ASX 200 finished marginally lower at 8,719.70 while the broader All Ordinaries index slipped 0.32 percent to 8,840.40.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 index rose 0.53 percent to 13,832.80, extending gains from the previous session to reach its highest level since September 30.
U.S. stocks dropped to their worst day since July overnight, feeling pressure from rising yields in the bond market as a hotter-than-expected inflation reading bolstered the case for another Federal Reserve rate increase this year.
The 10-year Treasury briefly jumped above 5.32 percent before giving back much of the gain as data showed the annual rate of consumer price growth jumped to 3.7 percent in September from 3.4 percent in August, matching expectations.
The annual rate of core consumer price growth accelerated to 2.6 from 2.4 percent in August, coming in slightly above economist estimates for 2.5 percent growth.
Traders now see a nearly 35 percent chance the Fed will raise borrowing costs at its next meeting later this month, up from the 22 percent probability seen a day earlier, according to the CME FedWatch tool.
The S&P 500 fell 1.1 percent for a fifth loss in the six days after setting a new record high. The tech-heavy Nasdaq Composite tumbled 1.9 percent on AI funding concerns, with Broadcom CEO comparing parts of the AI trade to a casino. The narrower Dow slipped 0.1 percent.
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