Asian markets were mixed on Wednesday as the recent surge in artificial intelligence-linked shares lost momentum and investors weighed elevated oil prices and persistent inflation. Japan and South Korea posted modest gains, while Australia and Hong Kong declined and mainland Chinese shares were little changed. A regional share gauge fell for a second straight session amid caution over geopolitical tensions and stronger-than-expected inflation in the United States.

South Korean stocks remained volatile after a sharp rally driven by technology optimism, with major chipmakers swinging between losses and gains. Shares in a leading electronics company tumbled after wage negotiations with its labour union broke down, raising the risk of a large-scale strike that could disrupt semiconductor production. Overnight on Wall Street, major benchmarks closed lower, led by declines in technology stocks.

Oil prices eased slightly but stayed near multi-month highs as tensions in the Middle East and supply disruptions around the Strait of Hormuz continued to unsettle markets. Investors also reassessed the outlook for interest rates after fresh data showed inflation in the United States running hotter than expected, reinforcing views that the Federal Reserve may keep borrowing costs elevated for longer. Treasury yields held near recent highs, while the dollar strengthened and gold edged higher.