1 hr ago
Asian Markets Fall as Oil Surge Fuels Rate Hike Fears
Several major Asian stock markets fell on Monday.
Korea’s Kospi dropped the most, while Japan’s Nikkei and Taiwan’s market also declined.
Technology stocks were under pressure after leaders of major AI companies asked for a slower approach to development.
Oil prices jumped by more than 3%.
The increase followed attacks involving the Houthis and Iran, as well as the closure of an important Saudi oil pipeline.
More expensive oil can raise concerns about inflation.
Investors therefore expected interest rates in the United States might rise.
Higher bond yields also made stocks and gold less attractive.
Markets are also watching possible interest-rate decisions in the United States and Japan this week.
Korea’s Kospi fell 3%, Japan’s Nikkei declined 1%, and Taiwan’s Weighted index dropped 0.5% on Monday.
Technology shares pressured the Nikkei after AI leaders called for a slower, more deliberate development approach.
Crude oil prices rose more than 3% following Houthi strikes, Iranian attacks on Gulf shipping, and the closure of a Saudi oil pipeline.
Rising oil prices increased inflation concerns and expectations that the U.S. Federal Reserve could raise interest rates this week.
Higher bond yields also weighed on equities and gold, with 10-year U.S. Treasury yields at 4.974%.
- Who
- Asian equity markets, AI companies, oil-market participants, and investors responding to inflation and interest-rate concerns.
- What
- The Kospi, Nikkei, and Taiwan Weighted index fell as oil prices and bond yields rose.
- Where
- Asian markets, with oil-related developments involving Saudi Arabia, Iran, and Gulf shipping routes.
- When
- Monday; markets were also anticipating interest-rate decisions in the United States and Japan this week.
- Why
- Rising oil prices, higher bond yields, possible interest-rate hikes, Middle East conflict, and pressure on AI stocks weighed on sentiment.
Key facts
- Kospi move
- Down 3% on Monday
- Nikkei move
- Down 1% on Monday
- Taiwan Weighted move
- Down 0.5% on Monday
- Crude oil
- Rose more than 3%
- 10-year Treasury yield
- 4.974%
- Two-year yield change
- Rose 26 basis points during the previous week
- 10-year yield change
- Rose 19 basis points during the previous week
Quotes
Vipin Kumar
AVP-Research at Globe Capital Market
“For more than a month, the index has been hovering in a consolidation phase (6,420–7,220 spot zone). Within this consolidation, any upside move is likely to face resistance around 7,050 and find support in the 6,700–6,800 range. The Hang Seng slid further down toward the price support near the 24,400 spot level, following a breakdown from a month-long congestion range.”
livemint.com
Sources
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