Asian Markets Tumble Amid Geopolitical Tensions and Economic Uncertainty

Asian stocks dropped on Wednesday, following Wall Street's sell-off due to Iran's missile strike on Israel, raising concerns of a larger conflict. Consequently, crude oil prices rose, and investors turned to safer assets like U.S. Treasury bonds and gold. Meanwhile, macroeconomic factors strengthened the U.S. dollar.


Devdiscourse News Desk | Updated: 02-10-2024 09:40 IST | Created: 02-10-2024 09:40 IST
Asian Markets Tumble Amid Geopolitical Tensions and Economic Uncertainty
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Asian stocks plummeted on Wednesday, mirroring the sharp sell-off on Wall Street after Iran's missile attack on Israel, which stoked fears of a broader regional conflict. In response, crude oil prices surged due to potential supply disruptions, while investors sought refuge in safe-haven assets, causing U.S. Treasury bond yields to decline in Asian trading hours and gold to hover near an all-time high.

The dollar, considered a safe-haven currency, traded near its strongest level in three weeks against the euro, buoyed by a resilient U.S. job market. This strength posed a counter-argument to the expectations of a significant Federal Reserve interest-rate cut in November. Meanwhile, euro zone inflation trends pointed towards an easing by the European Central Bank this month. Japan's Nikkei slumped 1.5%, South Korea's KOSPI fell 1.3%, and Australia's benchmark index lost 0.3%.

In the context of heightened geopolitical tensions, Brent crude futures climbed over 1% to $74.33 per barrel, following a 2.5% rise on Tuesday, while U.S. WTI futures increased by 1.3% to $70.73 per barrel. Additionally, benchmark 10-year Treasury yields dropped 1.5 basis points to 3.7278%, and the dollar index held steady at 101.21. U.S. politics will see Democrat Tim Walz and Republican JD Vance face off in a vice-presidential debate, an event also watched closely ahead of upcoming U.S. payroll data.

(With inputs from agencies.)

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