Japan’s Nikkei, Wall Street futures slip as higher oil prices raise inflation fears, Euro Stoxx 50 futures ease
U.S. stock futures moved lower, with both S&P 500 and Nasdaq futures declining 0.90 percent
Asian stock markets declined on Thursday following two consecutive days of gains, as oil prices climbed back toward $100 per barrel amid new supply disruptions linked to the escalating conflict in the Middle East.
Wall Street futures also edged lower during Asian trading as a sharp increase in oil prices raised concerns over intensifying inflationary pressures, which could drive borrowing costs higher worldwide.
Stock markets drew little reassurance from the International Energy Agency’s announcement that it would release 400 million barrels of oil from its reserves, the largest intervention of its kind on record. As part of the coordinated effort, the United States said it would begin releasing 172 million barrels from its reserves starting next week.
Asian shares fall as oil prices rise
In the Asian stock market, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.46 percent, while Japan’s Nikkei dropped 1.42 percent. In China, the CSI300 Index lost 0.49 percent, and Hong Kong’s Hang Seng Index slid 1.04 percent.
Japan’s broader TOPIX index declined by 1.56 percent, while Australia’s S&P/ASX 200 fell 1.31 percent. In other Asian markets, China’s Shanghai Composite index edged down 0.14 percent, while Singapore’s Straits Times Index also fell slightly by 0.46 percent.
Futures linked to India’s Nifty 50 also dropped 0.50 percent.
As of 5:40 GMT, Brent crude futures climbed $8.31, or 9.03 percent, to $100.3 a barrel, while U.S. West Texas Intermediate (WTI) gained $6.94, or 7.95 percent, to $94.19.
This week, Brent surged to $119.50 a barrel on Monday, its highest level since mid-2022, before retreating after U.S. President Donald Trump said the conflict with Iran could end soon.
On Wednesday, a spokesperson for Iran’s military command warned that oil prices could surge to $200 per barrel, saying such an outcome would be driven by deteriorating regional security, which the spokesperson accused the United States of destabilizing.
Attacks on oil tankers and the closure of several ports have intensified fears of supply disruptions from tensions in the region, particularly after Iran warned that no crude shipments would be allowed to pass through the Strait of Hormuz, a key global shipping route.
S&P 500 and Nasdaq futures slip on inflation concerns
U.S. stock market futures also moved lower, with both S&P 500 and Nasdaq futures declining 0.90 percent. U.S. data showed that the consumer price index increased by 0.3 percent in February, matching forecasts and exceeding January’s 0.2 percent rise. However, the report was not seen as especially significant, as the Iran war has begun to intensify inflationary pressures.
Fed funds futures continued to decline as investors worried that stronger inflation could make it more difficult for the Federal Reserve to loosen monetary policy. Markets are now pricing in just one additional rate cut from the Fed this year.
Meanwhile, fears of energy-driven inflation have also prompted markets to speculate that the European Central Bank’s next policy move could be a rate hike, possibly as early as June.
Read: Gold prices fall to $5,145.16 on U.S. dollar strength, reduced rate cut bets
Investors avoid currencies of major energy-importing economies
In the European stock market, EURO STOXX 50 futures fell 0.80 percent, while DAX futures dropped 0.87 percent.
Amid heightened market anxiety, investors moved toward the liquidity of the U.S. dollar while avoiding currencies from major energy-importing economies, including Japan and much of Europe.
The euro fell 0.3 percent to $1.1536, after closing at its weakest level since November last year. Meanwhile, the dollar edged up 0.1 percent to 159.12 yen, marking its strongest level since January.
The U.S. dollar strengthened by 0.3 percent, making dollar-denominated assets more expensive for holders of other currencies.
The risk-sensitive Australian dollar also declined 0.3 percent to $0.7133, after reaching a more than three-year high of $0.7188 on Wednesday amid expectations of an imminent interest rate hike by the country’s central bank.
Spot gold declined 0.52 percent to $5,145.16 per ounce, while U.S. gold futures for April delivery fell 0.54 percent to $5,151.1.
Meanwhile, Bitcoin fell 1.03 percent to $69,476.
