11/09/2026 03:17 AST
Asian stocks fell on Thursday as oil prices extended gains a day after breaking the psychological $100 barrier on the back of resurgent Middle East hostilities that have fanned inflation fears. With the United States and Iran exchanging strikes around the Strait of Hormuz, and Saudi Arabia entangled in a conflict with Yemeni rebels, there appears little prospect of an end to the crisis.
Brent crude passed $100 on Wednesday for the first time since July and has surged more than 20 percent in less than a week as forces exchanged attacks on vessels in the strait. Brent hit a high of $101.94 on Thursday, while West Texas Intermediate peaked at $97.79, its highest since May.
That has fanned speculation that the Federal Reserve and other central banks will have to raise interest rates to tame prices - US diesel is already at a record of almost $6 a gallon - with the European Central Bank tipped to lift borrowing costs on Thursday.
In the latest round of attacks, Iran said it had hit more than a dozen ships attempting to pass through the strait on Wednesday, and announced an expansion of a no-go zone outside the waterway. Tehran has choked off the strait since the war began at the end of February, while Washington continues to press a counter-blockade of Iranian ports. Iran also said it struck a US military base in Jordan in response to US forces destroying five Iranian oil tankers a day earlier.
Saudi Arabia, meanwhile, is entangled in a conflict with Houthi rebels who are striking oil facilities in the kingdom as part of an offensive toward the Red Sea's Bab Al-Mandab chokepoint, an increasingly important route for Saudi oil with the Strait of Hormuz shut.
The rally has stoked expectations that inflation will spike again, and comes as Washington prepares to release consumer price data that could sway the Fed's thinking on whether to raise rates next week. With bets on a hike rising, all three main indexes on Wall Street closed in the red and European markets also fell. Asia followed suit: Seoul, Hong Kong and Sydney all fell more than 1 percent, while Tokyo, Shanghai, Singapore, Wellington, Taipei and Manila were also well down.
"September is often tough, historically the weakest for Wall Street," said Neil Wilson at Saxo Markets. "After a decent if slightly mixed summer driven by record earnings momentum - at least in the US stock market - the next phase for investors is going to focus a lot more on the macro: central banks and inflation specifically, and that is likely to mean a rockier patch."
Inflation concerns have also been driving government bond yields higher, and they jumped further on Wednesday after the US Treasury announced an expanded buyback program that appeared to disappoint investors who had expected more.
In company news, shares in Japanese gaming giant Nintendo sank 5.5 percent following an online showcase of upcoming games that analyst Serkan Toto of Kantan Games called "very underwhelming". In terms of new software, Nintendo has now "shown everything that they have" for this calendar year, with a dearth of big original titles, Toto told AFP. "They don't have a lot, and I think the investors understand that," he said. - AFP
Key figures at around 0230 GMT
Tokyo - Nikkei 225: DOWN 0.8 percent at 64,597.46 (break)
Hong Kong - Hang Seng Index: DOWN 1.2 percent at 24,980.30
Shanghai - Composite: DOWN 0.3 percent at 3,939.11
West Texas Intermediate: UP 0.4 percent at $96.44 per barrel
Brent North Sea Crude: UP 0.1 percent at $101.28 per barrel
Dollar/yen: DOWN at 153.35 yen from 153.65 yen on Wednesday
Euro/dollar: UP at $1.1639 from $1.1629
Pound/dollar: UP at $1.3559 from $1.3544
Euro/pound: DOWN at 85.84 pence from 85.86 pence
New York - Dow: DOWN 0.8 percent at 52,380.66 (close)
London - FTSE 100: DOWN 1.3 percent at 10,670.06 (close)
AFP
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