Asia stocks sank on Wednesday, catching up with the sell-off on Wall Street after Iran’s ballistic missile strike on Israel provoked fears of a wider regional conflict, while crude oil pushed higher on the risk of supply disruptions. Investors flocked to safer assets, pushing US Treasury bond yields down in Asian time, while gold hovered near an all-time high. The safe-haven dollar traded close to its strongest in three weeks versus the euro.
Macroeconomics also buoyed the dollar, with a resilient US job market arguing for a smaller Federal Reserve interest-rate cut in November, and euro zone inflation trends backing a European Central Bank easing this month. Japan’s Nikkei slumped 1.5 per cent, while South Korea’s KOSPI dropped 1.
3 per cent and Australia’s benchmark lost 0.3 per cent. MSCI’s broadest index of Asia-Pacific shares slipped about 0.
5 per cent. Hong Kong’s Hang Seng had yet to open after a holiday on Tuesday. Mainland Chinese markets are shut for the week-long Golden Week holiday.
Trading in Taiwan was suspended due to a typhoon. US S&P 500 stock index futures weakened 0.16 per cent, after the cash index lost 0.
9 per cent overnight. “In the chain of potential market volatility shocks, geopolitics will typically trump economics, corporate earnings, or a central bank response – largely because most market players are poor at pricing risk around these events,” said Chris Weston, head of research at Pepperstone. “While these events typically recon.
