Asian markets opened with mixed dynamics as oil prices slightly decreased. Asian stocks showed an ambiguous picture on Thursday after a predominantly downward day on Wall Street. Positive data from the US was partially offset by high government bond yields and oil prices.
High oil prices remain an important factor influencing price growth, as commodities are supported by uncertainty in the Middle East, despite Saudi Arabia increasing production through a partially resumed East-West pipeline. Both major contracts fell on Thursday after rising by about one percent the previous day.
Brent crude with December delivery was priced at about $97.60 per barrel, while the November contract closed above $103. West Texas Intermediate held below $90. However, the drop in oil prices will have little impact on the significant fuel price hike in South Africa, which is already scheduled for October.
Analysts noted that traders were presented with 'Goldilocks' data, which boosted Wall Street stocks as dealers revised the probability of a second consecutive interest rate hike. Personal consumption expenditure was lower than forecast—3.4 percent, and the Ministry of Trade raised its estimate of economic growth in the second quarter due to the boom in artificial intelligence investments. Furthermore, private job creation exceeded expectations.
These indicators pointed to a healthy economy despite the impact of the Middle East crisis and rising oil prices. Investors adjusted their expectations regarding a Federal Reserve interest rate hike on October 28. The CME FedWatch tool showed a probability of a hike of less than 40 percent, compared to more than 65 percent earlier in the week.
Chris Osmond from Fifth Third Wealth Advisors stated: 'Second-quarter growth was stronger than expected, consumer spending was more resilient, the labor market recovered sharply in September, and the Fed's preferred inflation indicator was significantly lower than expected.' He added: 'The net effect overall favors risk assets and substantially reduces the probability of a rate hike in October.'
Nevertheless, investors remain concerned about borrowing cost prospects, as the yield on US 10-year Treasury bonds is near its highest level since 2007, and the 30-year yield reached a 24-year high.
On New York trading floors, the Dow and S&P 500 closed in the red, although the Nasdaq rose thanks to a technology rally spurred by optimistic forecasts from chip giant Micron, which nevertheless warned of margin compression. In Asia, chip manufacturers such as SK hynix and Samsung posted gains, lifting the Seoul market, and the Nikkei Tokyo index rose due to major successes by tech giants Kioxia, Advantest, Tokyo Electron, and investor SoftBank. Taipei and Singapore also showed growth, while Sydney, Wellington, Manila, and Jakarta experienced declines.
Key figures around 4:30 AM (SA time)
According to data, the Nikkei 225 in Tokyo rose by 2.4 percent, reaching 68,355.81 points. The Hang Seng index in Hong Kong closed on a holiday. The Shanghai Composite Index was also closed on a holiday. The West Texas Intermediate price fell by 0.3 percent to $90.11 per barrel, and the Brent North Sea Crude price dropped by 0.1 percent to $97.93 per barrel. The dollar to yen exchange rate rose to 158.04 yen from 157.38 yen on Tuesday. The euro to dollar rose to $1.1333 from $1.1325. The pound to dollar increased to $1.3268 from $1.3257. The euro to pound rose to 85.42 pence from 85.41 pence. In New York, the Dow index fell by 0.9 percent, closing at 50,906.05, and the FTSE 100 in London declined by 0.3 percent, closing at 10,606.00.