Asian equities edged lower on Thursday October 8, following Wall Street’s retreat, as high oil prices fuelled inflation fears and investors sold technology shares again.
MSCI’s Asia Pacific index shed 0.3%, with Japan and South Korea leading the declines. Japan’s Nikkei 225 dropped 1.12%, while the broader Topix fell 1.42%. South Korea’s Kospi lost 0.56% and Hang Seng futures pointed to a 0.6% lower open in Hong Kong. Mainland Chinese markets reopened after a holiday.
Samsung Electronics swung between gains and losses. The chip bellwether posted record profit, but the result still fell short of analyst estimates according to Bloomberg.
Wall Street set the tone overnight. The S&P 500 and the Nasdaq 100 each slid 0.2% as inflation concerns resurfaced, and the Philadelphia Semiconductor Index lost 1.2%.
In India, the GIFT Nifty, which indicates how the country’s stock market would open for the day’s trade, predicted a negative start in the red, potentially pushing the 50-stock index into red for the week.
Rising oil prices complicate the picture for investors because they add to inflationary pressure just as the US Federal Reserve tightens policy. Last month, the central bank raised interest rates for the first time since 2023.
Minutes of the Fed’s September meeting showed that all 19 officials backed lifting the target range for the benchmark rate to 3.75%–4%, the first increase since July 2023. Policymakers in the US acted after spotting signs that the economy was regaining strength. Officials also reviewed financial conditions. Many noted that, even after longer term US Treasury yields rose, conditions still supported growth because stocks had rallied and corporate bond spreads remained narrow.
The Japanese yen held steady near 158 per dollar, gaining 0.1% to 157.92. The minutes also revealed that the US Treasury Department, not the Fed using its own funds, carried out the US’s part in Japan’s late July intervention to support the yen.
The offshore yuan barely moved at 6.7020 per dollar.
Oil prices meanwhile climbed with the combined shadow of geopolitical risk and supply disruption. Brent crude rose 1% to around $101.20 a barrel after a report that the White House had asked the Pentagon to prepare strike options against Iran, which could be carried out before the midterm elections. West Texas Intermediate gained 0.9% to $89.09 a barrel.
With Bloomberg Inputs