Asian Stocks Slide as Middle East Tensions Worry Investors


Summary: Asian shares fall as investors seek safer assets amid mounting concerns over Middle East tensions. Gold prices near two-month highs.

Asian stocks declined on Thursday as investors turned risk-averse due to escalating tensions in the Middle East. This prompted a search for safer assets, causing gold prices to reach near two-month highs. The MSCI’s broadest index of Asia-Pacific shares outside Japan fell by 1.11%, while Japan’s Nikkei sank 1.35%. The sell-off in U.S. Treasuries continued, with the yield on 10-year notes touching a fresh 16-year high. Traders adjusted their expectations for a lesser likelihood of a rate cut as geopolitical uncertainties mounted. The deadly hospital blast during President Biden’s visit to Israel also derailed talks to prevent the war from spreading. Concerns over geopolitical risks and China’s property sector have kept investors jittery. China’s blue-chip stock index and the Hang Seng Index both fell, while U.S. stocks closed lower. Investors in Asia are closely watching earnings from Taiwan Semiconductor Manufacturing Co Ltd, as the chip industry emerges from its current downturn. Tesla CEO Elon Musk expressed concern about the impact of high interest rates on car buyers. Federal Reserve policymakers are signaling a pause in hiking interest rates for another couple of months. The Federal Reserve is expected to keep its key interest rate on hold in November and may delay rate reductions until the second half of next year. Oil prices eased after OPEC showed no signs of supporting Iran’s call for an oil embargo on Israel. Gold prices remain near two-month highs.

Tags: Asian stocks, Middle East tensions, gold prices, safety assets, geopolitical risks, Federal Reserve, interest rates, oil prices