Asian Stocks Mixed on Oil Spike and US Inflation Concerns

Asian stocks traded mixed on surging oil prices, robust US job data, and hints at tighter Federal Reserve monetary policy.

Asian stock futures in Japan, Hong Kong, and Australia stock futures rallied on Tuesday. Nikkei futures for December delivery rose by 1.64% to ¥31,778.0, while Hang Seng futures for October increased by 0.72% to HK$17,785.

China’s Shanghai Composite index decreased by 0.50% to CN¥3,081.52, while Hong Kong’s Hang Seng index rose by 0.88% to HK$ 17,727.00. The Australian S&P/ASX 200 index gained by 1.08% to A$ 7,045.70.

The geopolitical instability in the Middle East is another contributing factor following the Israeli government’s declaration of war against Palestine. The move sent the US West Texas Intermediate (WTI) November futures declining by 0.52% to $85.93 per barrel after a near 3.00% rise on Monday.

According to reports, the Israeli-Hamas war may result in a significant oil price surge and potential supply threats.

Additionally, investors are eyeing US inflation data and the Federal Open Market Committee (FOMC) minutes to determine the Fed’s future interest rate direction.

On the other hand, traditional safe-haven assets, gold, and the US dollar saw improvement in value during the uncertainty. Higher Treasury yields, however, have raised concerns about a possible economic turmoil.

Israeli-Hamas War Impact on Energy and Other Sectors

The ongoing geopolitical dispute between Israel and Palestine has also affected the energy and other sectors.

International oil rose significantly, leading other energy companies to increase. ExxonMobil climbed by 3.50% to $110.92, while Chevron soared by 2.77% to $166.72 per barrel.

Defense contractors’ stock also surged as the conflict continued. RTX was up 4.60% to $72.98, Northrop Grumman gained 11.43% to $471.61, and Lockheed Martin rose by 8.93% to $436.53.

Conversely, Israeli companies Teva Pharmaceutical Industries and Check Point Software Technologies (CHKP) saw a decline in the US. Teva was down by 6.37% to $8.82, and CHKP decreased by 1.50% to $134.97.