Investing.com– Most Asian stocks advanced on Thursday as optimism over another surge in artificial intelligence spending lifted semiconductor shares, although gains were capped by soaring oil prices amid escalating tensions in the Middle East.
U.S. stock futures edged down on Thursday by 03:05 ET (07:05 GMT) after Wall Street closed slightly lower overnight.
Alphabet () shares fell in after-hours trading, as investors responded to the company’s earnings release with a classic “sell the news” reaction despite a headline beat.
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Alphabet hikes capital spending forecast; rises
Investor sentiment in Asia was buoyed after Google parent Alphabet raised its annual capital spending forecast by an additional $15 billion, underscoring that the AI investment cycle remains intact despite concerns over mounting costs.
South Korea’s KOSPI outperformed regional peers, closing 4.4% as heavyweight memory chipmakers SK Hynix () and Samsung Electronics () jumped on expectations that Alphabet’s higher capital expenditure will support demand for high-bandwidth memory and AI servers.
In other news, South Korea’s economy grew 3.7% year-on-year in the second quarter of 2026, above expectations of 3.5% growth, aided chiefly by strong semiconductor exports as growing artificial intelligence spending fueled strong overseas demand.
Japan’s settled 0.4% higher, while the broader index rose 0.5%.
Hong Kong’s index traded 1.1% higher.
China’s and the blue-chip gained 0.2% each.
Gains across the region were restrained as crude oil prices climbed for a fifth consecutive session to six-week highs after Yemen’s Iran-aligned Houthis claimed attacks on two Saudi oil tankers in the Red Sea, heightening fears of disruptions to global energy supplies.
Higher oil prices rekindled concerns about global inflation, prompting investors to reassess the outlook for interest rates. The rise in energy costs also weighed on broader risk appetite even as technology shares found support from the AI theme.
Australia jobs surge in June, raises RBA hike bets
Australia’s labour market also remained in focus after data showed surged by 76,300 jobs in June, well above forecasts for a 16,400 increase, while the unemployment rate held at 4.4%.
The stronger-than-expected report increased chances that the Reserve Bank of Australia will raise its cash rate by 25 basis points before year-end. Traders are now focused on next week’s quarterly inflation figures, which could shape expectations for the RBA’s Aug. 11 policy meeting.
Australia’s S&P/ASX 200 ended 0.2% higher, while Singapore’s declined 0.6%.
India’s fell 0.5% by midday trading.
Attention now turns to more U.S. corporate earnings and developments in the Middle East, with markets watching whether geopolitical tensions continue to fuel oil prices and inflation concerns.