Asian stock indices fell broadly on Thursday as oil prices held above $100 a barrel and U.S. Treasury yields stayed elevated ahead of key inflation data. Hong Kong's Hang Seng index led regional losses, while investors braced for U.S. producer and consumer price reports due later in the week.
Asian equities fell broadly on Thursday, though they pared some early losses, as investors stayed nervous about oil prices above $100 a barrel and rising bond yields ahead of key U.S. inflation data. The selling followed a weaker Wall Street session, with all the major benchmarks ending in red.
Oil surge and yields weigh on risk appetite
Japan's Nikkei 225 traded 0.1% lower after falling nearly 1% earlier in the day, while the broader TOPIX index also ticked down 0.1%. Japanese shares were also weighed down by a sharply stronger yen, as investors increased bets on a Bank of Japan rate hike this month.
South Korea's KOSPI edged down 0.1% after sliding nearly 1.5% in early trade, with heavyweights Samsung Electronics and SK Hynix paring losses. Hong Kong's Hang Seng index slipped 1.6%, with the Hang Seng TECH sub-index declining more than 2%.
Brent crude holds above $100 after Middle East escalation
Brent crude futures edged lower on Thursday but remained above $100 a barrel after breaking above that psychologically important level for the first time since July. The surge followed a major escalation in attacks on shipping involving Iran and the United States, raising fears of further disruption to energy supplies through the Middle East.
The 10-year U.S. Treasury yield edged 0.1% lower, holding near 4.84% after reaching its highest level since 2023 in the previous session. A $6 billion Treasury buyback of longer-dated debt disappointed some investors who had expected a larger operation, helping keep yields elevated. The yield rise has added pressure to technology and other growth stocks, whose valuations are particularly sensitive to higher borrowing costs.
U.S. inflation data awaited as rate-hike bets hold
In mainland China, the Shanghai Composite index edged down 0.4%, while the blue-chip CSI 300 dipped 0.5%. Australia's S&P/ASX 200 dropped 1.2%, while Singapore's Straits Times Index fell 0.7%. India's Nifty 50 traded largely unchanged.
The oil rally has complicated the outlook for central banks by threatening to keep inflation elevated even as economic growth faces pressure from higher energy costs. Fed funds futures were pricing about a 60% chance of a rate hike at the Federal Reserve's Sept. 15-16 meeting, according to CME FedWatch. Investors are particularly focused on U.S. producer prices due Thursday and consumer prices due Friday.
Source: Investing.com
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