Asian Stock Markets React to Rising Oil Prices Amid Iran Conflict

Recent trading saw mixed moves across major Asian indices. The Nikkei 225 slipped 1.6% to 68,098.54, the ASX 200 edged up 0.2% to 9,088.60, and the Kospi fell 0.6% to 6,933.60, while Hong Kong’s Hang Seng and Shanghai’s Composite lost 0.6% and 0.5% respectively, according to the report. In the United States, the S&P 500 declined 0.5% to 7,745.06, the Dow Jones Industrial Average dropped 272.63 points to 53,459.78, and the Nasdaq slipped 0.3% to 26,644.91.

Associated Press

The market moves occur as oil prices have surged following the outbreak of hostilities in Iran. Brent crude rose 21 cents to $91.08 per barrel, after gaining 2.7% to $90.87 the previous day, while U.S. crude added 34 cents to $84.84 per barrel in Asian trading. The report notes that Brent fluctuated between $72 and $102 in the prior month as hopes rose and fell for a U.S.–Iran agreement that would allow tankers to leave the Persian Gulf freely.

Associated Press

• Treasury yields: The 10-year Treasury yield climbed to 4.72% from 4.68% on the prior Friday, up from 3.97% before the Iran war, according to the report.

Associated Press

• Mortgage rates: The average long-term U.S. mortgage rate has risen near its highest level in a year in response to higher yields.

Associated Press

• Currency moves: The U.S. dollar strengthened to 159.43 yen, while the euro edged up to $1.1585.

Associated Press

Analysts cited in the report argue that the rally in oil prices is pressuring Treasury yields, which in turn heightens inflation risks and raises the probability of further Federal Reserve rate hikes. Higher rates are expected to dampen economic activity, potentially curbing inflation but also slowing growth. The report also highlights that robust earnings from Japanese firms in the April-June quarter have helped offset some concerns, with analysts suggesting the Bank of Japan may consider raising rates in the coming months.

Associated Press