Oil near $90 as Middle East fighting intensifies; Asian markets mixed after tech rout

Oil prices held near $90 a barrel on Thursday as renewed fighting in the Middle East intensified concerns about supply, while Asian stock markets staged a patchy recovery after a tech-led sell-off.

Why oil climbed

Analysts and markets reacted after the United States launched strikes on Iran in retaliation for Tehran’s attacks on US bases in Jordan and as Saudi Arabia and the US announced strikes on militant bases in Iraq. The fresh hostilities, which included Iranian missile launches at Jordan and reports of an American attack near Iran’s border with Iraq, reinforced the fragility of any truce and worries about the reopening of the Strait of Hormuz energy passageway.

Brent North Sea crude had jumped more than eight percent on Wednesday and was trading at $89.44 per barrel in the early hours of Thursday. West Texas Intermediate was quoted at $83.55 per barrel.

Asian markets: a mixed rebound

South Korea’s Kospi rallied after two days of heavy losses, helped by a dramatic earnings report from chipmaker Samsung. The index was up 2.5 percent at 5,806.49 at the cited key-figure time.

Samsung reported a second-quarter operating profit jump of 1,813 percent, with revenue up 130 percent and net profit up 1,300 percent. The results, reported by South Korea’s Yonhap news agency citing a financial data firm, helped Samsung shares rise more than six percent on Thursday after a 16 percent fall the previous two days. SK hynix was flat following a 20 percent drop in the prior two days.

Tokyo’s Nikkei 225 was up 1.3 percent at 62,218.41, while Hong Kong, Taipei and Jakarta also posted gains. Other regional markets were mixed: Shanghai’s Composite was down 0.4 percent at 3,814.80, and markets in Sydney, Singapore, Wellington and Manila were down.

Drivers behind the moves

Tech-sector volatility had weighed on indices after steep losses at chip firms. Microsoft reported that its cloud unit grew at the fastest pace in four years, while Facebook parent Meta issued a disappointing revenue forecast for the year, contributing to mixed sentiment across markets.

South Korea’s government said it would move to limit retail traders’ access to leveraged exchange-traded funds, citing concerns that concentrated trading in single-stock leveraged products had contributed to heightened market volatility.

US policy and broader market reaction

Uncertainty about the Federal Reserve’s path for interest rates also influenced markets. Fed officials held steady at their latest meeting, but three policymakers dissented by calling for a hike. Commenting on inflation policy, Kevin Warsh said:

“We are on the job. We will deliver. We are focused like a laser, making sure we can do it.”

IG’s Fabien Yip noted that Chair Warsh stopped short of flagging an imminent hike, and SPI Asset Management’s Stephen Innes said the dissents were a consequential signal. Analysts cited a spike in 30-year Treasury yields as evidence of trader scepticism over whether the Fed can bring inflation back to its two percent goal without further tightening.

Key market figures (around 4:30am SA time)

• Seoul – Kospi: UP 2.5 percent at 5,806.49
• Tokyo – Nikkei 225: UP 1.3 percent at 62,218.41
• Hong Kong – Hang Seng Index: UP 0.1 percent at 25,817.85
• Shanghai – Composite: DOWN 0.4 percent at 3,814.80
• West Texas Intermediate: DOWN 1.1 percent at $83.55 per barrel
• Brent North Sea Crude: DOWN 1.4 percent at $89.44 per barrel
• Dollar/yen: UP at 163.49 yen
• Euro/dollar: DOWN at $1.1452

Outlook

Markets remained sensitive to developments in the Middle East and to signals from central banks. Renewed hostilities and the unsettled view on US interest-rate policy were cited as key factors shaping near-term price moves in oil and risk assets across Asia.