Asian Stocks Fall, Oil Climbs With Iran in Focus: Markets Wrap
(Bloomberg) — Asian equities fell and oil rose to its highest level since August as escalating tensions in Iran weighed on sentiment.
The MSCI Asia Pacific Index dropped 0.4% — its first retreat in three days. Treasuries held their gains and gold hovered around $5,000 an ounce after haven demand lifted those assets during the US session. The dollar was poised to notch its best week since mid-November.
Wall Street gauges fell on Thursday, with alternative asset managers facing sharp declines after private credit fund Blue Owl Capital Inc. restricted withdrawals from one of its funds. Markets were set to reopen in Hong Kong after the Lunar New Year holidays, while mainland China remained shut.
West Texas Intermediate crude oil edged up 0.1%, taking the gains this year to 16%, as President Donald Trump said the US has to “make a meaningful deal” with Iran, adding that the next 10 days will tell whether there will be an accord.
Caution has resurfaced in markets as US moves on Iran introduced a fresh layer of geopolitical risk, halting a tentative rebound in equities and dampening broader risk appetite. The renewed tensions threaten to derail a nascent recovery that had begun to take hold after weeks of volatility driven by concerns over AI-related disruption across sectors and companies.
“Markets are taking it with a pinch of salt, but there’s still that possibility it could escalate, so you’ve got to cover yourself,” said Nick Twidale, chief market analyst at AT Global Markets. “It feels like President Trump is using it as a negotiating tactic. Obviously investors are naturally concerned because it could escalate.”
The US military is stationing a vast array of forces in the Middle East, including two aircraft carriers, fighter jets and refueling tankers, giving Trump the option for a major attack against Iran as he pressures the country to strike a deal over its nuclear program.
American military buildup in the Middle East means Iran’s window to reach a diplomatic agreement over its atomic activities is at risk of closing, according to the head of the United Nations nuclear watchdog. A potential war would put flows at risk from a region that pumps about a third of the world’s oil.
“Crude oil prices are rising on the anticipation of possible military action in Iran,” said Louis Navellier at Navellier & Associates. “The US and Iran are expected to meet again, and those negotiations are expected to be closely watched.”
Read: Why US-Iran Tensions Put Focus on Strait of Hormuz: QuickTake
Some traders also attributed the risk-off mood to caution ahead of Friday’s readings on the economy and inflation, particularly after minutes of the Federal Reserve’s latest meeting showed renewed concerns about price pressures. Also, the US Supreme Court has scheduled Friday as its next opinion day amid a global wait for a ruling on Trump’s signature tariffs.
Corporate Highlights:
Bank of America Corp. is committing $25 billion to private-credit deals, joining its Wall Street rivals in putting its own balance sheet behind lending in the fast-growing market, according to people with knowledge of the matter. Johnson & Johnson is preparing a potential sale of the orthopedics unit that it has been planning to separate, with big buyout firms already circling, according to people familiar with the matter. Ted Sarandos, co-chief executive officer of Netflix Inc., said his company’s acquisition of Warner Bros. Discovery Inc. will lead to more films in theaters, addressing a key complaint from Hollywood in the high-stakes battle for one of the industry’s iconic studios. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 10:03 a.m. Tokyo time Hang Seng futures were unchanged Nikkei 225 futures (OSE) fell 1.3% Japan’s Topix fell 1.3% Australia’s S&P/ASX 200 was little changed Euro Stoxx 50 futures rose 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1770 The Japanese yen was little changed at 155.08 per dollar The offshore yuan was little changed at 6.8987 per dollar The Australian dollar was little changed at $0.7054 Cryptocurrencies
Bitcoin rose 0.5% to $67,213.3 Ether rose 0.5% to $1,957.71 Bonds
The yield on 10-year Treasuries was little changed at 4.06% Japan’s 10-year yield declined two basis points to 2.120% Australia’s 10-year yield declined three basis points to 4.75% Commodities
West Texas Intermediate crude rose 0.1% to $66.50 a barrel Spot gold rose 0.2% to $5,007.72 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson and Gabrielle Ng.
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