Global stock markets fall amid surge in oil prices — Asharq Al-Awsat
Global stock markets continued to decline on Thursday, while prices for the two main oil contracts rose by more than 1%. Fears of a renewed acceleration in inflation also pushed government bond yields to multi-year highs, Asharq Al-Awsat reports.
Stock market declines in Asia
The market decline came after Wall Street retreated, where technology companies lost some of their recent gains. Indices in Tokyo, Hong Kong, Sydney, Singapore, Seoul, Wellington, Taipei and Manila fell. At the same time, the Shanghai market rose slightly after investors returned from a week-long break.
The increase in oil prices was linked to concerns over supplies from the Middle East. The publication reported that market anxiety intensified after data showed an increase in Tehran's attacks on tankers in the Strait of Hormuz, as well as warnings from oil officials about low global reserve levels.
Oil and inflation expectations
Oil supply was also affected by a reduction in production in the Gulf of Mexico by more than 500,000 barrels: producers halted operations due to the approaching Tropical Storm Isaias. Reports that members of the International Energy Agency were prepared to use additional volumes from reserves did not ease tensions among traders.
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Minutes of the US Federal Reserve's September meeting showed that most participants considered another increase in the target range for the federal funds rate likely before the end of the year. Meeting participants also noted signs of renewed strengthening in the US economy.
Technology sector and currencies
Investors are preparing for the corporate earnings season, paying particular attention to technology companies because of their high valuations and substantial investments in the artificial intelligence sector. Samsung shares fell, although the company forecast a 782.5% year-on-year increase in operating profit for July-September, to 107.4 trillion won, or $80.3 billion. The forecast was below analysts' average estimate of 108.7 trillion won.
Meanwhile, the euro remained near its lowest levels since June of the previous year due to concerns over France's high public debt, which affected the bond market.
