Asian stock markets fall, oil falls as US weighs on reserves issuance

Asian stocks fell on Thursday after the global rally this week, after Wall Street faltered overnight, while oil fell sharply as the United States weighed heavily on its reserves to rein in rising fuel prices.

Brent crude futures fell 4.4% to $108.50 a barrel and US crude futures were down more than 5% to $101.76 a barrel in morning trading.

The United States is considering freeing up to 180 million barrels of oil over several months from strategic reserves, four US sources said, as the White House tries to cut fuel prices that have risen since Russia’s invasion of Ukraine late last month.

Meanwhile, rallying stocks lost momentum as hopes for a quick peace began to fade and optimism shifted to concern about a looming interest rate hike.

MSCI’s broadest index of Asia Pacific shares outside Japan is 0.2%, led by a 0.7% drop for Hong Kong’s Hang Seng. Japan’s Nikkei fell 0.2%. Australia’s heavy resources index rose 0.4%.

Overnight, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all fell, following similar bearish moves in European stocks.

“In US markets, from which we take our cues, the sell-off reflects the ongoing assessment of inflation threats and what the Fed is going to do about it,” said Rob Carnell, chief economist at ING in Singapore.

“At the same time, over the past 24 hours, markets have cautiously responded positively to events in Ukraine, with Russia refocusing away from Kyiv, but things still look quite uncertain.”

Bond markets were on fire after a bit of a sell off.

Two-year Treasury yields, which track policy expectations, were last at 2.2922% and rose more than 150 basis points for the quarter — the largest such rise since 1984 on expectations of a rapid rate hike.

The yield on the 10-year Treasury, most sensitive to long-term growth expectations, was last at 2.3378% after hitting 2.56% on Monday, the highest since May 2019.

Inflation continues to put pressure on governments and central banks around the world. Germany posted a massive inflation rate of 7.6% on Wednesday, sending the two-year bond yield into positive territory for the first time since 2014.

Spot gold was down slightly, 0.11%, at $1,930.74 an ounce. [GOL/]

(Editing by Himani Sarkar).

(The title and image for this report may have been reformulated only by the Business Standard staff; the rest of the content is automatically generated from a shared feed.)

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