Asian Markets Tumble as Oil Prices and Inflation Concerns Mount

Asian markets were mostly lower on Tuesday as concerns about rising oil prices and inflation outweighed the positive impact of strong corporate earnings.

The Japan's benchmark Nikkei 225 sank 2.5% to 67,460.73, while South Korea's Kospi lost 1.6% to 6,869.83.

Analysts said that robust earnings reports in Asia and the US, partly tied to artificial intelligence (AI), have helped counter worries about the impact of the war in Iran on global oil prices.

According to BofA Securities, AI demand has broadened its beneficiary base across various industries, including semiconductor production equipment, power equipment, machinery, electronic components, and materials.

Oil prices crept higher early Tuesday after a brief respite last month driven by hopes for an end to the war with Iran. The price for a barrel of Brent crude rose 0.5% to $91.35 a barrel, while benchmark U.S. crude rose 0.8% to $85.16 a barrel.

Higher oil prices have been a major factor behind stubbornly high inflation. On Wall Street, stocks edged further away from their record heights on Monday, with the S&P 500 falling 0.5%, the Dow Jones Industrial Average dropping 272 points, or 0.5%, and the Nasdaq composite slipping 0.3%.