Oil prices rise and most Asian shares fall after US launches fresh strikes on Iran

Oil prices jumped more than 2 per cent and most Asian shares fell after the US conducted fresh strikes on Iran, escalating tensions in the vital Strait of Hormuz waterway. The US military claimed that it launched the strikes after Iran attacked three ships in the strait. Tehran had not claimed responsibility for the attacks on the ships. Iranian state media said the latest US strikes targeted Qeshm Island, Bandar Abbas and Sirik. Iran retaliated by targeting American military installations in Bahrain and Kuwait. Parliamentary speaker and chief negotiator Mohammad Ghalibaf accused the US of committing "major" violations of the agreement signed by the two countries last month.He said the US had violated "Iranian adjustments in the strait", continually threatened to attack Iran and reinstated oil sanctions. "The era of bullying and extortion is over. It leads nowhere. We don't fold," he said in a post on X. In the wake of renewed fighting, Brent crude, the international standard, jumped 2.6 per cent to $76.09 a barrel early on Wednesday, while the US crude benchmark gained 2.6 per cent to $72.25 per barrel. In recent weeks, both benchmarks had declined to the levels they were at before the US-Israeli war on Iran began in late February. In early trading, Tokyo's Nikkei 225 lost 0.3 per cent to 68,077.96 while South Korea’s Kospi shed 2.9 per cent to 7,429.13. The South Korean index had soared and then fallen back, briefly surpassing the 9,000-mark last month before succumbing to bouts of heavy selling of big AI-related tech shares like Samsung Electronics and SK Hynix. Samsung fell 2.9 per cent early on Wednesday after dropping about 7 per cent the day before. SK Hynix rose 2.4 per cent. Taiwan's Taiex lost 0.2 per cent. US futures were little changed. In Hong Kong, the Hang Seng rose 2.4 per cent to 24,057.24. The Shanghai Composite index gained 0.5 per cent to 4,011.05. The AI boom in shares appears to largely bypass Chinese markets, but investors appear to be focusing on domestic efforts to build out the country’s own AI capacities. Tech shares led Wednesday's rally, with Tencent Holdings gaining 3.1 per cent while e-commerce and financial giant Alibaba Group Holding jumped 8.1 per cent. Baidu advanced 4.7 per cent. Elsewhere in Asia, Australia's S&P/ASX 200 shed 0.7 per cent to 8,738.90, while India's Sensex also lost 0.7 per cent. On Tuesday, the roller-coaster ride for AI stocks whipped back down, dragging Wall Street lower. The S&P 500 fell 0.4 per cent to 7,503.85, although the majority of stocks within the index rose. The drops for stocks in the artificial-intelligence industry dragged the Nasdaq composite 1.2 per cent lower to 25,818.69, while the Dow Jones Industrial Average dropped 0.2 per cent, from its record to close at 52,925.15. Markets are being hit by waves of worries that AI-related share prices are now too high and that heavy investments in computer chips and data centres may not yield enough productivity and profits to justify the spending. Advanced Micro Devices sank 6.5 per cent and Intel shed 9.7 per cent. Micron Technology lost 4.7 per cent. SpaceX, which owns the xAI business, fell 6.8 per cent in its first day of trading after it was included in the Nasdaq 100 index. Rivian Automotive dropped 18.1 per cent after the electric vehicle company said it’s selling 75 million shares of its stock, a move that dilutes the ownership stakes of earlier shareholders. In other trading early on Wednesday, the US dollar rose to 162.38 Japanese yen from 162.11 yen. The euro was unchanged at $1.14.