Asian Stocks Slip as Iran Tensions, Samsung Weakness and Fed Caution Weigh on Markets

Asian stock markets mostly declined on Thursday as renewed geopolitical tensions in the Middle East, higher oil prices and cautious signals from the U.S. Federal Reserve weakened investor sentiment. Concerns over Samsung Electronics' disappointing earnings reaction also continued to pressure South Korean equities, despite selective gains across semiconductor stocks.

Wall Street ended mixed overnight after the Federal Reserve's June meeting minutes reinforced a cautious approach to interest rates. U.S. stock futures, including the S&P 500 Futures and Nasdaq 100 Futures, traded little changed, offering limited direction for Asian markets.

South Korea remained the region's weakest performer. Samsung Electronics dropped another 2.5% after plunging nearly 7% in the previous session, as investors remained unconvinced despite the company's sharp increase in quarterly operating profit. LG Innotek lost more than 5%, while SK Hynix rebounded 3.5% following reports that demand for its planned $28 billion U.S. share sale exceeded seven times the available shares. Nevertheless, the KOSPI fell nearly 1.8%, extending losses after officially entering bear-market territory earlier this week.

Japan outperformed regional peers as bargain hunting returned to semiconductor-related stocks. The Nikkei 225 gained about 1.5% and the TOPIX added 0.5%, supported by strong advances in Murata Manufacturing, TDK and Kioxia Holdings after Bain Capital confirmed its exit from the flash memory company.

Elsewhere, Australia's S&P/ASX 200, Hong Kong's Hang Seng, the Shanghai Composite and the CSI 300 all finished lower. Singapore's STI rose 0.7% on defensive buying, while India's Nifty 50 Futures posted modest gains.

Investor caution intensified after the United States launched fresh strikes on Iranian military targets, citing efforts to protect commercial shipping through the Strait of Hormuz. Iran responded with missile and drone attacks targeting U.S. military facilities in Kuwait and Bahrain. Although President Donald Trump later said he did not expect a wider conflict, rising oil prices renewed concerns over inflation.

The Fed's June meeting minutes also highlighted persistent inflation risks tied to tariffs, geopolitical uncertainty and AI-driven demand, reinforcing expectations that policymakers will remain patient before easing monetary policy. Investors are now focused on China's June inflation figures, Malaysia's central bank decision and next week's U.S. consumer inflation report for further market direction.