MARKET UPDATE
Asia stocks slip on tech losses with oil surge.
Asian stocks fell broadly on Thursday with technology shares leading losses, as investors remained nervous about oil prices above $100 a barrel and rising bond yields ahead of key U.S. inflation data.
The selling followed a weaker Wall Street session, with the tech-heavy Nasdaq Composite falling 0.6% overnight.
U.S. stock futures were mixed in Asian trading Thursday, with Nasdaq 100 Futures falling modestly.
Tech shares lead losses amid oil surge, elevated yields
Japan’s Nikkei 225 fell 0.8%, while the broader TOPIX index fell 0.4%.
Gains in Japanese shares were capped by a sharply stronger yen, as investors increased bets on a Bank of Japan rate hike this month.
South Korea’s KOSPI slid 1.1%, with heavyweights Samsung Electronics (KS:005930) and SK Hynix (KS:000660) falling 1.4% and 0.6% respectively.
Hong Kong’s Hang Seng index slipped 1.6%, with the Hang Seng TECH sub-index declining more than 2%.
Gold holds near $4,400.
Gold prices were little changed on Thursday as investors awaited U.S. inflation data for clues on whether the Federal Reserve will raise interest rates at its meeting next week.
Higher Treasury yields and renewed Middle East tensions remain near term headwinds, although a softer dollar and longer-term demand for bullion continue to offer support.
At 20:43 ET (00:43 GMT), XAU/USD fell 0.1% to $4,398.53 an ounce, while Gold Futures declined 0.4% to $4,442.00. XAG/USD was little changed at $67.28 an ounce, while XPT/USD fell 0.6% to $1,888.23. The U.S. Dollar Index was little changed at 98.81.
Gold has traded in a relatively narrow range around $4,400 in recent weeks after rebounding from a floor near $4,000 in July.Investors have continued to weigh the metal’s longer term appeal as a portfolio hedge against near term pressure from higher bond yields and worsening tensions in the Middle East.
Bitcoin down to $78.3k on Iran jitters.
Bitcoin fell on Thursday, remaining under pressure as a worsening U.S.-Iran conflict and lofty Treasury yields weighed heavily on appetite for risk-driven assets.
The world’s largest cryptocurrency fell 0.8% to $78,299.6 by 01:07 ET (05:07 GMT), with broader crypto prices also on the backfoot.
Oil prices rose sharply this week, adding to concerns over sticky inflation and its effects on interest rates, in turn underpinning yields.
Iran jitters, higher yields weigh on Bitcoin
U.S.-Iran hostilities remained squarely in focus after the two engaged in some of their worst fighting since the onset of the war in late-February.
Iran said it struck 10 ships in and around the Strait of Hormuz, while the U.S. said it retaliated by sinking five Iranian oil tankers.
The development underpinned oil prices and kept Brent well above the $100 a barrel level. Higher oil in turn added to concerns that energy-driven inflation will elicit a hawkish outlook for the Federal Reserve in the coming months.
Treasury yields also surged this week, adding to pressure on risk-driven assets. 10-year yields hit a three-year high after the U.S. Treasury Department’s announcement of a bigger buyback of longer-dated bonds largely fell flat.
Higher rates bode poorly for speculative, liquidity-dependent assets like crypto, with Bitcoin having historically underperformed during Fed rate hike cycles.
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