LGT Navigator

Oil and yields weigh on Asia, US stocks hit records

Rising energy prices and elevated borrowing costs kept Asian share markets under pressure on Wednesday, as fresh attacks in the Middle East fuelled fears over oil supplies. India’s central bank tightened monetary policy for the first time in more than three years in response to mounting inflation risks. European shares advanced on Tuesday, while optimism about corporate resilience and artificial intelligence (AI) demand carried major US benchmarks to new highs. Investors now turn to Wednesday’s release of the minutes from the Federal Reserve (Fed) meeting for clues about the interest rate outlook.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

Mixed markets
© Shutterstock

Asian stocks fall as India raises rates

Asian equities declined on Wednesday, with Japan’s Nikkei 225 down 0.4%, Korea’s KOSPI losing 1.2% and Hong Kong’s Hang Seng falling 0.6%, despite record closing highs on Wall Street. US Treasury yields near multiyear highs, with the ten-year yield moving higher to 5.3%, and renewed oil price gains weighed on sentiment. The Reserve Bank of India unanimously raised its benchmark repo rate by 25 basis points to 5.5%, its first increase since February 2023, and adopted a tighter policy stance as inflationary pressures widened. India’s Nifty 50 fell 0.4%, led by technology stocks, while investors awaited minutes from the Fed’s September meeting later on Wednesday.

Oil rises on Saudi attack concerns

Brent crude oil futures rose 1% to USD 101.60 per barrel, while West Texas Intermediate (WTI) futures gained 0.8% to USD 90.18, as concerns about Middle Eastern supply disruptions outweighed recovering oil flows. Saudi Arabia’s aviation authority reported attacks on airports in Jazan and Najran on Tuesday amid escalating hostilities with Yemen’s Iran-backed Houthis. Increased Iranian attacks on tankers passing through the Strait of Hormuz also threatened the recovery in exports through the waterway. These risks overshadowed improving Saudi supplies, with the energy minister reporting that oil volumes transported through the East-West Pipeline had reached 5.8 million barrels by Tuesday morning. The US Dollar Index rose 0.3% to 102.10, while gold declined 0.7% to around USD 4130 per ounce. Bitcoin fell 1.3% to around USD 84,300.

US stocks rise as indices hit records

US equities gained on Tuesday, with the S&P 500 advancing 0.6% to 7818.93 points and the Nasdaq-100 adding 0.5% to 31,224.47 points after both reached record highs during trading. The Dow Jones Industrial Average increased 0.5% to 51,521.28 points. Gains reflected growing confidence that US companies can withstand elevated energy costs and interest rates, alongside optimism about demand for AI. Nuclear power producer Constellation Energy rose more than 12% after Google parent Alphabet agreed a multibillion-dollar electricity supply deal to support its AI data centres.

Euro-area retail sales edge higher

Euro-area retail sales volumes increased by 0.1% in August after declining by 0.6% in July, according to Eurostat data released on Tuesday. Sales were 0.8% higher than a year earlier, while the EU recorded growth of 0.1% month-on-month and 1.2% year-on-year. The modest euro-area recovery reflected a 0.5% rise in non-food sales excluding automotive fuel and a 0.1% increase in food, drink and tobacco sales, partly offset by a 1.9% fall in automotive fuel sales. European equities closed higher on Tuesday, with the Euro Stoxx 50 gaining 0.5%, Germany’s DAX rising 0.8% and France’s CAC 40 advancing 0.4%.

Swiss unemployment rate holds steady

Switzerland’s unemployment rate remained at 3% in September, according to figures released by the State Secretariat for Economic Affairs on Tuesday. The number of unemployed people fell by 0.8% from August to 140,480, but was 5.4% higher than a year earlier. The Swiss Market Index gained 0.6% on Tuesday.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: German manufacturing production (08:00), French trade balance (08:45), Swiss foreign currency reserves (09:00), Federal Reserve monetary policy meeting minutes (20:00).

LGT helps you make informed investment decisions

Global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.