Market Update: European Shares Fall While Asia Sees Gains Amid Rising Oil Prices
BANGKOK — On Thursday, European stock markets mostly dipped, while Asian markets experienced upward momentum. The escalating conflict with Iran has driven Brent crude oil prices above $98 a barrel.
Futures for major U.S. stock indices such as the S&P 500 and Dow Jones Industrial Average both fell by 0.4%. In Europe, Germany’s DAX index decreased by 0.6% to 24,999.26, and France’s CAC 40 was down by 1.1% at 8,349.33. Meanwhile, Britain’s FTSE 100 edged down 0.2%, settling at 10,696.31.
In contrast, many Asian markets rose, led by South Korea’s Kospi, which surged 4.4% to 7,096.89. Investor interest in artificial intelligence stocks picked up despite a quieter day on Wall Street. Samsung Electronics rose by 3.7%, and memory chipmaker SK Hynix climbed 4.9%.
Japan’s Nikkei 225 increased by 0.5% to 66,422.60, thanks to gains in technology firms, including SoftBank Group, which skyrocketed by 3.8%. The U.S. dollar traded at 163.36 yen, as Japan’s currency lingered near its lowest level in four decades, influenced by expectations of widening interest rate gaps due to rising U.S. inflation.
In other Asian markets, Hong Kong’s Hang Seng Index rose by 1.3% to 25,210.81, while the Shanghai Composite index rebounded slightly, closing up 0.3% at 3,876.78. Australia’s S&P/ASX 200 also saw modest gains of 0.2%, finishing at 8,839.00. Taiwan’s Taiex inched up 0.1% while India’s Sensex dropped by 0.6%.
On Wednesday in the U.S., stock indices remained relatively unchanged, even as oil prices surged by 3%. The S&P 500 dipped slightly by 0.1%, while the Dow Jones Industrial Average was nearly flat. The Nasdaq composite fell 0.6%, impacted by Alphabet Inc.’s 1.5% decline ahead of its earnings announcement. While the company reported better-than-expected results, its shares fell by an additional 3.5% in premarket trading.
Tesla’s shares took a hit, dropping 1.3% during regular trading and 5.6% in after-hours, following news of declining profits due to increased spending on research and development, despite a rise in vehicle sales.
Concerns loom over whether the heavy investments in AI technology will lead to substantial profits. These worries have kept AI stocks concerning to investors for several weeks.
With rising oil prices affecting overall market sentiment, they are increasing costs for businesses and potentially dampening consumer spending. Early Thursday, Brent crude rose 4.3% to reach $98.16 a barrel, marking its highest level since early June. After dropping to below $72 earlier this month, instability in the Strait of Hormuz, a key oil transport route, is exacerbating these price hikes.
U.S. benchmark crude also saw a gain of 3.6%, hitting $89.91 per barrel. Recent military actions by the U.S. against Iran have intensified concerns, as both sides target infrastructure. Higher oil prices could reignite inflation, prompting central banks, including the Federal Reserve, to consider raising interest rates, which might slow economic growth and negatively impact stock prices.
In early trading on Thursday, the yield on the 10-year Treasury rose to 4.65%, compared to 4.63% late Tuesday, significantly up from 3.97% before the onset of the conflict with Iran. This increase has contributed to long-term U.S. mortgage rates reaching their highest levels in nearly a year.
Meanwhile, the euro held steady at $1.1414.
