Asian markets mixed on AI doubts

The MSCI EM Asia gauge was largely unchanged, hovering near two-week lows, while an index tracking ASEAN stocks gained 0.4% after hitting a two-week low in the previous session

Asian markets were choppy on Monday as investors weighed AI-driven growth against rising cost pressures, while keeping ​an eye on a fragile Iran-U.S. ceasefire that kept oil prices higher and the dollar near a one-year high.

The MSCI EM Asia gauge was largely unchanged, hovering near two-week lows, while an index tracking ASEAN stocks gained 0.4% after hitting a two-week low in the previous session.

Equity markets moved unevenly, reflecting investor caution over stretched artificial intelligence-driven rallies, particularly in South Korea and Taiwan, and lingering uncertainty about how rising costs could filter through the sector.

KOSPI, which shed 7% ​last week, dropped as much as 3.4% earlier in the session on Monday, although it pared some losses to trade nearly 2% lower.

Stocks ​in Taiwan rose 2.1%. The index has added 56% so far this year and is the ⁠second-best-performing market behind the KOSPI’s 97% rally.

The narrative at the moment is focused on artificial intelligence return on investment and whether cost pressures ​are starting to cascade down the supply chain, said Kyle Rodda, senior financial market analyst at capital.com.

Last week’s announcement by Apple shows that the cost pressures caused ​by the demand for raw materials for the AI build-out are about to hit consumers directly.

In Southeast Asia, Thailand’s stock index advanced more than 1%, driven mainly by electronic products manufacturer Delta Electronics Thailand, which added nearly 5% on Monday and 84% this year.

Stocks in Malaysia declined 0.5%. Equities in Jakarta slipped 0.4% and were set for their worst ​June since 2015. The index was also tracking its sixth straight month of declines, with losses of around 4.5% in June.