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Asian shares all in red, with Nikkei down 1.2%

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Oil up over 1.5% on Trump's Venezuela blockade

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BOE, ECB, Norges Bank, Riksbank set to decide policy

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US CPI report for November also due on Thursday

By Stella Qiu

SYDNEY, Dec 18 (Reuters) - Asian shares fell on Thursday

as the tech sector took a beating on renewed angst about AI

spending, while investors braced for a wave of central bank

meetings set to underscore policy divergence worldwide.

Geopolitical tensions are roiling the commodities markets.

Oil prices extended a rebound from five-year lows after

President Donald Trump ordered a "blockade" of all sanctioned

oil tankers entering and leaving Venezuela. Silver hit a new

record that helped pull up gold.

Sterling nursed losses after an unexpected drop in UK

inflation all but guaranteed a rate cut from the Bank of England

later in the day.

The European Central Bank, the Norges Bank and Riksbank are

also due to deliver their policy decisions on Thursday, with

focus squarely on the outlook as all three are widely expected

to hold rates steady. In the region, traders are bracing for a

rate hike in Japan on Friday though there is less certainty

about the pace of tightening next year.

MSCI's broadest index of Asia-Pacific shares outside Japan

fell 0.5% as South Korea dropped 1.3%

and Hong Kong's Hang Seng index slipped 0.5%. Japan's

Nikkei was down 1.2%.

Nasdaq futures gained 0.3% and S&P 500 futures

rose 0.2%, after a tech-led selloff on Wall Street as investors

grappled with renewed concerns over record AI spending. Shares

of AI bellwether Nvidia ( NVDA ) tumbled 3.8%.

Oracle plunged 5.4% after it announced an equity

deal to support a data center project would not include a key

partner Blue Owl Capital. The stock has shed almost 50%

from mid-September when a deal with OpenAI sparked a 35% one-day

rally.

"Oracle remained the primary source of anxiety... This

latest setback deepened investor scepticism around Oracle's

aggressive AI infrastructure buildout," said Tony Sycamore,

analyst at IG, adding that he has now moved to a more neutral

stance on the Nasdaq 100.

"Worries over soaring capex, heavy debt, construction

delays, OpenAI's massive cash burn, and mixed Q2 earnings have

eroded confidence, positioning Oracle as the poster child of

fading AI infrastructure hype."

INFLATION SURPRISE FIRMS CASE FOR BOE RATE CUT

On the monetary policy front in the U.S., Federal Reserve

Governor Christopher Waller, who is expected to be interviewed

by Trump as a candidate for the next Fed chair, said the central

bank has room to cut interest rates amid signs of job market

weakness.

Investors are also watching out for a U.S. inflation report

for November later in the day that will not include the

month-on-month measure since a record government shutdown

prevented data collection for October.

Forecasts are centred on an annual rise of 3% in core

inflation last month.

In the forex markets, sterling held at $1.3374,

having slumped to as far as $1.3313 overnight after data showed

British inflation fell much more than forecast to 3.2% in

November, its lowest since March. That all but cemented the case

for a rate cut from the BOE later in the day, which is about 98%

priced in.

The euro was steady at $1.1742, not far from a

three-month top of $1.18, ahead of the European Central Bank

policy decision where expectations are for no change.

Treasuries were largely steady. Two-year Treasury yields

fell 1 basis point to 3.4725%, having budged little

overnight, while the 10-year yield was flat at

4.1431%.

Oil prices gained for a second day after Trump's

announcement of the Venezuela blockade with most exports from

the country remaining on hold. U.S. crude rose 1.7% to

$56.91 per barrel, while Brent crude futures were up

1.5% at $60.62 a barrel.

Spot gold prices slipped 0.3% to $4,330 per ounce,

while silver also eased 0.2% to $66.17 per ounce but

remained just a touch below a record high of $66.88 hit on

Wednesday.

(Editing by Shri Navaratnam)