Asian stocks mixed as tech sector struggles to rebound from selloff

HONG KONG: Asian stocks were mixed on Monday (Nov 2) as investors struggled to recover from last week's tough run fuelled by disappointing earnings from tech titans, while eyes were also turning to the United States ahead of crucial midterm elections.Traders did get some support from a drop in oil prices following a report that US President Donald Trump wanted negotiations with Iran to play out rather than resume his war after the polls.Artificial intelligence (AI)-linked firms were hit by another wave of selling as Wall Street giants including Amazon, Alphabet and Microsoft signalled they would keep pouring money into data centres and chips even as investors grow impatient for returns.The firms, along with Meta, are on track to spend more than US$700 billion on capital investment this year, much of it on AI infrastructure, according to analyst estimates. The reports added to concerns that the vast sum poured into the sector may have been overdone, while Bloomberg said 90 per cent of software companies in the S&P 500 had beaten earnings expectations this season, while just 70 per cent topped revenue.That compared with all companies beating profits in the previous three months, and more than 80 per cent topping on sales.Apple, Advanced Micro Devices and software titan Palantir are due to report this week.Steep losses in New York saw the Nasdaq end almost three per cent down, and Asian tech also struggled at the start of this week.Japanese chipmaker Kioxia plunged more than 15 per cent after giving a cautious outlook that fell short of forecasts.The firm has plunged around 70 per cent from its record high set in June, though it is still up more than 200 per cent since the start of the year.South Korea's Samsung also fell more than one per cent, though rival SK hynix was up more than one per cent. Taiwan's TSMC added nearly two per cent.The mixed performance in tech was reflected in broader markets, with Tokyo, Sydney, Singapore and Taipei all down while Seoul, Hong Kong and Shanghai rose.Oil prices sank more than two per cent on hopes for a negotiated end to the Iran crisis, with Axios reporting that the US president wanted talks to continue, to the disappointment of Israeli Prime Minister Benjamin Netanyahu.The news outlet also said Vice-President JD Vance had sent a letter to Iranian national security chief Mohsen Rezaei about possible new talks, marking the highest-level move in months."Despite the stalemate outcome following the Israeli elections, the chances of a diplomatic breakthrough may be improving following intensified mediation efforts by Qatar and regional allies," said FOREX.com's Razan Hilal."Reports point to discussions about sanctions relief and reopening the Strait of Hormuz, while nuclear restrictions and inspections remain major unresolved issues."However, Trump continued to hint at more military action while on the campaign trail Sunday.He reiterated his threat to resume strikes, telling a rally: "The only reason why I'm not finished with Iran is I want to be nice."I want to try and save all those lives if I can ... But at some point we're going to have to give them the hammer."That came after he had told reporters that "we still have to take care of, I would say one or two sites, but we can do that in 10 minutes".For its part, Iran's army spokesman Mohammad Akramini said at the weekend that any renewed war could last longer than the previous round of fighting, and that "the American president would not be in a position to dictate the timing or the conditions of its conclusion".Investors were keeping tabs on the midterms, where Democrats are predicted to see thumping wins as they look to take back control of Congress and impose a first political check on Trump's unprecedented pursuit of power.Polls show Democrats are all but certain to take the majority from Republicans in the House of Representatives in Tuesday's vote and have a shot at winning the Senate.