Asian Stocks Track US Declines With Oil in Focus: Markets Wrap
(Bloomberg) — Asian stocks followed their US peers lower in early trading Friday, with oil prices in focus on growing fears that the war in Iran will further crimp energy supplies and boost inflation.
A gauge of Asian shares dropped 0.6% after the S&P 500 slid 1.5% to its lowest since November. Even investors that had rotated into the apparent safety of large US tech companies felt the sting as the Nasdaq 100 declined 1.7% on Thursday and a gauge of megacaps approached the threshold of a correction. Still, S&P 500 futures rose in Asia Friday, suggesting some relief for US markets.
Brent oil traded near $100 a barrel as both US President Donald Trump and Iran’s new supreme leader struck defiant tones, with the latter saying the Strait of Hormuz should remain shut. Preventing Iran from having nuclear weapons and threatening the Middle East is “of far greater interest and importance to me” than the cost of oil, Trump said in a social media post.
“It feels as though the market has taken its timeline for the duration of the closure of the Strait of Hormuz and the conflict more broadly, and pushed it further out,” Chris Weston, head of research at Pepperstone Group, wrote in a note.
Goldman Sachs Group Inc. warned that oil prices could exceed the 2008 peak if flows via Hormuz remain depressed through March. Brent rallied to a high of $147.50 that year. The Iran war is causing unprecedented turmoil in oil markets, hitting 7.5% of global supply and an even bigger swath of exports, the International Energy Agency said.
As energy costs have surged, a gauge of global stocks has fallen more than 5% from a record high on Feb. 25.
The US issued its second authorization for buyers to take Russian oil cargoes already at sea, a move intended to ease growing pressure on prices.
Separately, the Trump administration plans to waive a century-old maritime law that requires American ships be used to transport goods between US ports as it seeks to blunt surging oil prices, Bloomberg News reported. The US Navy could start escorting tankers through the Strait of Hormuz by the end of March, Energy Secretary Chris Wright told CNBC.
Treasuries were steady in early Friday trading after falling across the curve in the previous session as inflation worries grew. The policy-sensitive US two-year yield climbed nine basis points to 3.74% Thursday and the 10-year rose three basis points to 4.26%.
A gauge of the dollar edged lower on Friday after closing at its highest level in almost two months. Investors will also be on the lookout for US inflation data due later, although the backward-looking measure may do little to alter investors’ thinking given the geopolitical uncertainty.
Traders have been trimming bets on Federal Reserve interest-rate cuts this year. Before the war broke out at the end of February, they were pricing in about 61 basis points of cuts by year-end, and now that has fallen to about 20 basis points.
With the Fed widely expected to hold rates steady next week, investors will be closely watching for any shifts in its outlook, as Trump renews calls for the central bank to ease policy.
“The most hawkish outcome would be if the Fed removed its easing bias from the statement, while the median projection shifted from one cut this year to no change,” said Stephen Brown at Capital Economics.
Corporate Highlights:
Honda Motor Co. shares fell the most in almost a year after warning investors that it faces as much as ¥2.5 trillion ($15.7 billion) in charges and a historic annual loss. Adobe Inc. Chief Executive Officer Shantanu Narayen will resign from his position atop the creative software giant amid deep skepticism about the company’s ability to thrive in the AI era. Blue Owl Capital Inc. defended its recent sale of $1.4 billion of loans from three of its funds, arguing the transaction contained no backstops or hidden incentives, as the asset manager remains a primary target of bets on a private-credit reckoning. Tesla Inc. received government clearance to convert its investment in Elon Musk’s xAI into a small stake in SpaceX ahead of the rocket maker’s planned IPO. Shares of PayPay Corp. jumped 14% in its trading debut Thursday after the digital payments firm’s $879.8 million US IPO, the biggest listing for a Japanese company on a US stock exchange in a decade. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.4% as of 10:22 a.m. Tokyo time Nikkei 225 futures (OSE) fell 0.8% Japan’s Topix fell 0.1% Australia’s S&P/ASX 200 rose 0.4% Hong Kong’s Hang Seng fell 0.5% The Shanghai Composite fell 0.1% Euro Stoxx 50 futures rose 0.4% Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.1% to $1.1526 The Japanese yen rose 0.1% to 159.13 per dollar The offshore yuan was little changed at 6.8816 per dollar The Australian dollar rose 0.2% to $0.7089 Cryptocurrencies
Bitcoin rose 2% to $71,568.85 Ether rose 2.8% to $2,121.85 Bonds
The yield on 10-year Treasuries declined one basis point to 4.25% Japan’s 10-year yield advanced three basis points to 2.210% Australia’s 10-year yield declined three basis points to 4.93% Commodities
West Texas Intermediate crude fell 0.9% to $94.89 a barrel Spot gold rose 0.7% to $5,115.75 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson and Cormac Mullen.
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