Asia-Pacific markets moved in a weak range on Thursday, March 26, with most indexes slipping between 0.2% to 1.4%, as investors reacted to ongoing geopolitical tensions involving the U.S., Israel, and Iran. Rising oil prices and fresh concerns in the tech sector added further pressure across the region.

Despite positive cues from Wall Street overnight, sentiment remained fragile. Iran said it is reviewing a U.S. ceasefire proposal but made clear it has no intention of entering negotiations, keeping uncertainty elevated. U.S. markets lost momentum, with the S&P 500 futures down 0.1%, signaling cautious sentiment heading into Asian trading.

South Korea Hit Hard as AI Breakthrough Sparks Chip Selloff

South Korea led regional losses, with the KOSPI plunging up to 3% as heavyweight chip stocks tumbled.

Samsung Electronics fell around 4% and SK Hynix dropped 5% after Google unveiled “TurboQuant,” a new AI compression technology that could significantly reduce memory usage in large language models.

The development raised fears that future demand for high-end memory chips could weaken, threatening a key growth driver for Korean tech giants that have benefited from the recent AI boom and supply shortages.

Japan Reverses Gains as Government Taps Oil Reserves

Japanese stocks turned lower after early gains, with Nikkei 225 down 0.2% and TOPIX falling 0.6% into negative territory.

Adding to market tension, Japan began releasing oil from its strategic reserves to ease supply disruptions linked to the Iran conflict. The move aligns with similar actions by major economies attempting to stabilize global energy markets.

Asia-Pacific Markets Under Pressure

Across the region, markets showed broad weakness. Australia’s ASX 200 fell 0.2%, China’s CSI 300 and Shanghai Composite slipped ~0.3%. Hong Kong’s Hang Seng dropped 1.4% and Singapore’s Straits Times Index rose 0.4%, outperforming peers.

The ongoing conflict continues to drive volatility. Iran has effectively restricted access to the Strait of Hormuz, a critical chokepoint responsible for nearly 20% of global oil and gas supply. While hopes for a ceasefire briefly lifted sentiment, uncertainty around Iran’s response keeps markets on edge. For now, investors are navigating a volatile mix of geopolitical risk, rising oil prices, and potential disruption from rapid technological change.