Asian shares tumble as oil prices fall after US weighs reserves release
Stocks rally lost momentum as hopes for a quick peace started to fade and the upbeat sentiment turned to worry about looming interest rate h
Asian stock markets tumbled on Thursday after this week’s global rally, as oil dropped sharply as the United States weighed a massive draw from its reserves to rein in surging fuel prices. The US is considering a plan to release about 1 million barrels of oil a day from its reserves over several months to battle inflation, Bloomberg reported on Thursday.
Brent crude futures were down 4.4 per cent at $108.50 a barrel and US crude futures fell more than 5 per cent to $101.76 a barrel in morning trade as the US is considering releasing up to 180 million barrels of oil over several months from strategic reserves. White House is trying to lower fuel prices that have surged since Russia invaded Ukraine late last month.
Stocks rally lost momentum as hopes for a quick peace started to fade and the upbeat sentiment turned to worry about looming interest rate hikes.
US President Biden will give remarks later on Thursday announcing the plan, three sources said, aimed at lowering gasoline prices that have risen to records following Russia’s invasion of Ukraine.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.2%, led by a 0.7% drop for Hong Kong's Hang Seng. Japan's Nikkei fell 0.2%. Australia's resource-heavy index was up 0.4%.
Overnight, the Dow Industrial Average, the S&P 500 and the Nasdaq Composite were down, following similar downward movements in European stocks.
Bond markets were smouldering after a stinging sell off.
Two-year Treasury yields, which track policy expectations, were last at 2.2922% and have climbed more than 150 basis points for the quarter - the steepest such rise since 1984 on expectations of quick-fire interest rate hikes.
The yield on the 10-year Treasury note, which is more sensitive to the outlook for long-term growth, was last at 2.3378 percent after hitting 2.56 percent on Monday, the highest since May 2019.
Inflation continues to squeeze governments and central banks around the world. Germany registered a whopping 7.6 percent inflation rate on Wednesday, sending its 2-year bond yield into positive territory for the first time since 2014.
Spot gold was down slightly, 0.11 percent, at $1, 930,74 an ounce.