Asian Markets Climb Amid Ongoing AI Concerns and Oil Price Declines

Market Overview and Key Developments

By Scott Murdoch

SYDNEY, Feb 18 (Reuters) - Asian stocks pushed higher on Wednesday despite the renewed artificial intelligence worries gripping international markets, while oil prices were under pressure after Iran touted progress in nuclear negotiations with the United States.

The New Zealand dollar sank after the central bank said monetary policy needs to remain accommodative for some time to support the economic recovery.

Stock Market Performance

Japan's benchmark Nikkei 225 index rose 0.93% to 57,090.14, poised to snap a three-day skid, while Australia's S&P/ASX200 was up 0.5%.

Mainland China, Hong Kong, Singapore, Taiwan and South Korean were among markets closed for Lunar New Year holidays.

The positive start in Asia followed a lacklustre session on Tuesday on Wall Street as investors grappled with the outlook for the AI boom.

Concerns that companies are over-investing, along with angst about the extent to which the nascent technology could disrupt labor markets, have fuelled investor jitters in recent weeks.

In the U.S. overnight, The Dow Jones Industrial Average rose 0.07% to 49,533.19, the S&P 500 was up 0.10% at 6,843.22 and the Nasdaq Composite gained 0.14% to 22,578.38. The S&P 500 fell 0.88% initially before making up ground to close in positive territory.

The yield on benchmark U.S. 10-year notes was flat at 4.054% on Wednesday. The 30-year bond yield fell 0.4 basis points to 4.6788%.

"AI uncertainty remains a source of volatility, both in terms of the difficulty in assessing which AI companies will be the winners and losers but also what sort of impact will AI have in other companies and sectors of the economy," NAB analysts said.

Commodity Prices and Currency Movements

Brent and West Texas Intermediate crude oil futures were little changed on Wednesday at $67.42 and $62.32 per barrel, respectively, after both slid to close at more than two-week lows in the previous session.

Following talks in Geneva on Tuesday, Iran's foreign minister said Tehran and Washington reached an understanding on main "guiding principles" towards resolving their longstanding nuclear dispute, easing worries about a military conflict near the Strait of Hormuz that could disrupt global oil supply.

Gold was 0.2% weaker to around $4,867 per ounce and silver was down by around the same margin to around $73.30 per ounce.

"Gold prices dipped as a stronger U.S. dollar weighed on the market, with declining U.S. Treasury yields providing little support," ANZ analysts said.

Geopolitical Factors and Economic Outlook

"Investors remained uncertain amid subdued trading in Asia. Prospects of easing geopolitical tension with positive outcomes from the Iran-US talks in Geneva weighed on haven demand for gold."

The U.S. dollar index, which measures the greenback against a basket of major peers, was flat in Asia hours at 97.12.

The traditional safe-haven currency held its ground as geopolitical risks kept markets on edge and investors awaited minutes from the Federal Reserve's January meeting, due later on Wednesday, for signals on the path for interest rates.

The euro edged down 0.1% to $1.1844, while sterling stabilised at $1.3563 following a 0.5% slide in the previous session.

The New Zealand dollar slid 0.6% to $0.6014. The Aussie eased 0.2% to $0.7075.

The yen firmed 0.1% to 153.12 per dollar.

Japan's annual bond issuance will likely surge 28% three years from now due to rising debt-financing costs, Reuters reported on Tuesday, citing a finance ministry estimate.

Japan would need to issue up to 38 trillion yen ($248.3 billion) worth of bonds in the fiscal year starting in April 2029 to fill a hole from expenditures surpassing tax revenues, up from 29.6 trillion yen in fiscal 2026, the report said.

(Reporting by Scott Murdoch; Editing by Kevin Buckland)