Asian Markets Slip from Peaks as Oil Rally Dampens Risk Appetite
SYDNEY: Asian stock markets retreated on Thursday after briefly touching record highs, as surging oil prices and renewed geopolitical tensions weighed on investor confidence, particularly amid unresolved issues between the United States and Iran.
The decline came as fresh disruptions in Gulf shipping routes pushed energy prices higher, reinforcing concerns about supply stability and global economic risks.
Futures pointed to a weaker start in Europe, with regional contracts falling about 1.1 per cent, while US futures edged down 0.5 per cent during Asian trading.
Earlier gains fade across regional markets
The positive momentum from Wall Street failed to carry over into Asian trading. Although the S&P 500 and Nasdaq Composite had closed at fresh highs overnight on strong earnings, Asian markets quickly lost steam.
The MSCI Asia-Pacific index excluding Japan, after hitting a record earlier in the session, reversed direction and slipped around 0.5 per cent.
Japan’s Nikkei 225 dropped 0.9 per cent after initially climbing to a new high for a second straight day. Similarly, equities in Taiwan and South Korea retreated after touching record levels.
In Greater China, losses were more pronounced, with mainland blue-chip stocks falling 0.8 per cent and Hong Kong’s Hang Seng Index declining 1.1 per cent.
Oil surge triggers cautious sentiment
The rally in oil prices emerged as the main catalyst behind the market pullback. Brent crude rose 1.4 per cent to US$103.30 per barrel, extending gains after a sharp 3.5 per cent jump in the previous session.
The increase followed reports that Iran had seized two container vessels attempting to pass through the Strait of Hormuz, heightening tensions in a key global energy corridor.
Investors are closely monitoring whether the fragile ceasefire in West Asia can hold, as any escalation could further disrupt supply chains and push energy prices higher.
Charu Chanana, investment strategist at Saxo Bank, noted that markets remain highly sensitive to geopolitical developments.
“In a situation where there is neither full conflict nor complete peace, even speculation can move oil prices and unsettle risk assets,” she said.
Corporate earnings offer mixed signals
In the United States, corporate earnings continued to shape market direction. Shares of GE Vernova surged nearly 14 per cent after lifting its earnings outlook, buoyed by strong demand linked to artificial intelligence.
Boeing also advanced more than five per cent after reporting a smaller-than-expected quarterly loss.
Meanwhile, Tesla slipped about two per cent in after-hours trading, as investors reacted cautiously to rising capital expenditure tied to AI and robotics despite positive cash flow.
Bond yields edge higher
US Treasury yields climbed alongside oil prices, reflecting inflation concerns tied to higher energy costs. The two-year yield rose to 3.8106 per cent, while the 10-year yield increased to 4.3214 per cent.
Currency markets remained relatively stable, with the US dollar holding modest gains amid a cautious investment climate.
Analysts expect market volatility to persist in the near term, driven by geopolitical uncertainty and fluctuations in global energy prices.
-wilayah.com.my
