(Bloomberg) -- Oil advanced after tensions in the Middle East flared up with Iran firing a barrage of missiles at Israel. Asian stocks gained, led by Hong Kong, as China’s stimulus measures continued to sway investors.
Crude oil extended gains while gold held near a record. Equities in Japan and South Korea declined following Tehran’s sharp but brief strike in reprisal for Israel’s attacks on Lebanon in recent days. The Israel Defense Forces said many of the missiles had been intercepted as Prime Minister Benjamin Netanyahu vowed to retaliate.
Chinese shares listed in Hong Kong rose on Wednesday, extending a stimulus-induced rally as traders returned from a public holiday. An index of Chinese stocks is advancing for a 13th straight session. Wall Street’s fear gauge — the VIX — spiked higher on Tuesday, touching a key level that usually indicates more market swings are in store.
“We have to bear in mind that Hong Kong and China have been underweight or underexposed for a while now so it won’t be that sensitive to short-term market events such as geopolitics,” said Billy Leung, an investment strategist at Global X Management in Sydney. The move also reflects two days of market action as traders come back from holiday, he said.
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Markets in mainland China remain shut for Golden Week. The Taiwanese stock market is also closed as Super Typhoon Krathon approaches the island.
Chinese property stocks extended gains on Wednesday as the Hong Kong market resumed trading following the Golden Week holiday, after Beijing followed other major cities in China in relaxing home purchase rules. Australian and New Zealand government bonds rose, along with Asian defense and energy shares.
The Middle East conflict eclipsed signals from US economic data on Tuesday. The US ISM price index fell by the most since May 2023, while US job openings rose in August to a three-month high, at odds with other readouts indicating slowing demand for workers. Treasury yields were steady after dropping on Tuesday.
Investors are also hearing from vice presidential nominees JD Vance and Tim Walz in their sole debate of this election season in the US.
In corporate news, Samsung Electronics Co. is laying off workers as part of a plan to reduce global headcount by thousands of jobs.
Elsewhere, South Korea’s inflation slowed more than expected, supporting the case for a pivot to monetary easing by the central bank when it sets policy next week. Meanwhile, euro-area inflation slowed below the European Central Bank’s 2% target for the first time since 2021, prompting money markets to add to bets on another quarter-point decrease by the ECB this month.
Key events this week:
- S&P Global Manufacturing PMI on Wednesday
- Fed speakers include Richmond’s Thomas Barkin, Cleveland’s Beth Hammack, St. Louis’s Alberto Musalem and Fed Governor Michelle Bowman on Wednesday
- US nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 10:48 a.m. Tokyo time
- Nikkei 225 futures (OSE) fell 1.9%
- Japan’s Topix fell 0.9%
- Australia’s S&P/ASX 200 was little changed
- Hong Kong’s Hang Seng rose 2.8%
- Euro Stoxx 50 futures rose 0.4%
- Nasdaq 100 futures were little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1073
- The Japanese yen fell 0.2% to 143.80 per dollar
- The offshore yuan rose 0.2% to 7.0157 per dollar
- The Australian dollar rose 0.3% to $0.6901
Cryptocurrencies
- Bitcoin rose 1% to $61,423.38
- Ether rose 0.9% to $2,473.99
Bonds
- The yield on 10-year Treasuries was little changed at 3.73%
- Australia’s 10-year yield declined five basis points to 3.96%
Commodities
- West Texas Intermediate crude rose 1.5% to $70.91 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Rob Verdonck.
©2024 Bloomberg L.P.
