Asian equity markets edged higher on 14 October as semiconductor stocks recovered some of their recent losses, although rising oil prices and uncertainty over US monetary policy continued to influence market sentiment.
The rebound followed a difficult session for technology shares, particularly those linked to artificial intelligence (AI). South Korean chipmakers Samsung Electronics and SK Hynix gained more than 2%, while Japan’s Kioxia held steady. The MSCI Asia-Pacific index excluding Japan rose 0.5%, Japan’s Nikkei added 0.2% and South Korea’s Kospi advanced 1.8%.
The recovery provided some relief after recent selling pressure across the semiconductor sector. However, the modest gains suggested that market participants remained cautious about the outlook for technology valuations, energy costs and interest rates.
Oil prices were a further source of concern. Fears about potential disruption to energy supplies following attacks on Saudi Arabia pushed US crude towards $95 a barrel, while Brent crude reached approximately $106.60. Higher energy prices could add to inflationary pressures and complicate decisions by central banks seeking to control price growth without placing additional pressure on economic activity.
Market participants were awaiting September’s US Consumer Price Index (CPI) figures for further indications of the Federal Reserve’s next policy decisions. Economists had forecast annual headline inflation of 3.6%, with core inflation expected to increase by 0.2% month on month. The figures were expected to help determine whether persistent price pressures might prompt another interest rate increase as early as October.
A higher-than-expected reading could strengthen expectations of tighter monetary policy, potentially supporting the US dollar while putting pressure on equities and other risk-sensitive assets. New York Federal Reserve President John Williams had indicated that another rate increase might be necessary before the end of the year to contain inflation, although he did not anticipate further increases in 2027.
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