Asian Shares Ease on Tech Pullback as Iran Talks Keep Oil in Focus

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.69%, led by declines in tech firms. South Korean shares dropped 3.64% while Japan's Nikkei lost 1.57%.

In Seoul, Samsung Electronics fell 2.44% and peer SK Hynix lost 6.95%. In Tokyo, Kioxia plunged 9.61%, while Tokyo Electron slumped 4.61%.

The pullback followed a weaker session on Wall Street overnight, where the Nasdaq snapped a days-long winning streak as shares of Elon Musk-led SpaceX and Advanced Micro Devices stumbled after their quarterly earnings.

Although the AI and satellite company highlighted faster-than-expected returns from its AI spending, investors remained concerned about how long its profitable Starlink business could continue to bankroll costly investments in data centres. And while AMD's results beat analysts' estimates, they fell short of investors' lofty expectations.

A senior Iranian source and two regional officials told Reuters that a proposed deal between Iran and Oman to help end five months of war between Iran and the United States would give Tehran control over ships entering the Gulf through the Strait of Hormuz, one of the biggest concessions yet to Iran.

Oil prices were steady in the US$70-a-barrel range. Brent crude futures fell 0.18% to US$79.31 per barrel, while US West Texas Intermediate futures edged 0.35% down to US$74.96 a barrel.

Madison Cartwright, senior geo-economics analyst at Commonwealth Bank of Australia, said a deal to reopen the Strait of Hormuz could be reached by early September, though he remained sceptical that a deal was imminent. "Iran still has more leverage and will extract additional concessions from the US under any new deal," Cartwright said in a note.

Investors are now turning their attention to US labour market data ahead of Friday's closely watched nonfarm payrolls report. ADP figures on Wednesday showed private employers added 44,000 workers last month, slowing from 95,000 in June and coming in about 25,000 below expectations. Economists polled by Reuters expect the government's report to show 80,000 jobs added in July, after a 57,000 gain in June, with unemployment forecast to hold at 4.2%.

Futures markets are pricing in about a 54% chance of a rate hike at the Federal Reserve's September meeting, down from 58% a day ago, according to the CME's FedWatch tool. The yield on benchmark US 10-year notes fell 1.04 basis points to 4.607%.

Against the yen, the dollar was steady at 157.66 following a rare joint yen-buying intervention by Japan and the US last week, with both pledging further action if necessary. Sony Financial Group senior analyst Juntaro Morimoto said the dollar/yen pair is likely to struggle for direction, with investors staying on the sidelines ahead of Friday's jobs report.

Spot gold rose 1.06% to US$4,290.26 an ounce, while spot silver gained 0.65% to US$62.48 an ounce.