Asian Stocks Fall as Oil Prices Rise Ahead of US CPI Data

Asian stock markets traded mostly lower on Wednesday as a brief recovery in artificial intelligence (AI) shares faded, while rising oil prices and uncertainty ahead of key U.S. inflation data weighed on investor sentiment.

Chinese equities led regional losses, with the CSI 300 index dropping 1.4% and the Shanghai Composite declining 0.9%. Australia's S&P/ASX 200 fell 0.6%, South Korea's KOSPI slipped 0.4%, and Hong Kong's Hang Seng lost 0.1%. Japan's Nikkei 225 managed a 0.1% gain, while India's Nifty 50 declined 0.4%.

Wall Street closed slightly lower overnight following mixed U.S. bank earnings. Meanwhile, S&P 500 futures rose 0.15%, and Nasdaq 100 futures remained largely unchanged.

Oil prices continued climbing amid renewed attacks near the Strait of Hormuz and Saudi Arabia, raising concerns about global energy supplies. Brent crude traded near $106.50 per barrel, while West Texas Intermediate reached $94.40.

Investors are closely watching September's U.S. Consumer Price Index (CPI), with headline inflation expected to reach 3.6% annually and rise 0.6% monthly. Core inflation is forecast to increase 0.2% month-on-month.

Technology stocks showed mixed performance following Tuesday's AI-driven selloff. Samsung Electronics gained 2.8%, while SK Hynix advanced 2%. Taiwan Semiconductor Manufacturing rose 1.4%, and Foxconn climbed 2.6%. However, Japan's Kioxia declined 1.8%.

Concerns about growing competition from Chinese memory-chip producer ChangXin Memory Technologies continued to pressure semiconductor stocks.

Investors also awaited earnings from Bank of America and Morgan Stanley for further clues about corporate performance and AI investment spending.

New York Fed President John Williams indicated that another interest rate increase may be necessary this year to control inflation. Markets assigned a 22% probability to an October rate hike.

In China, September exports surged 36.3% annually, exceeding forecasts of 25.5%, while imports increased 31%, surpassing expectations of 24.5%.

However, consumer inflation remained subdued at 0.9%, below the projected 1%. Producer prices accelerated 5%, reflecting rising energy and manufacturing costs.

Elsewhere, Singapore's economy expanded 5.4% annually in the third quarter, beating expectations of 5.1% but slowing from the previous quarter's 6.2% growth.

Asian markets remain sensitive to U.S. monetary policy expectations, geopolitical tensions, and inflation risks as investors assess the outlook for global economic growth.