Asian markets were in the red on Thursday as a wave of uncertainty washed over the region, driven primarily by new U.S. sanctions targeting major Russian oil firms. The sanctions prompted crude oil prices to jump over $2 a barrel, escalating tensions in an already volatile international landscape. U.S. President Donald Trump’s latest move to exert pressure on Moscow in response to the ongoing conflict in Ukraine has left investors across Asia reeling from the impact on global markets.
As of early Thursday, U.S. benchmark crude rose $2.31 to reach $60.81 per barrel, while Brent crude climbed $2.38 to settle at $64.97 per barrel. The energy market reacted swiftly to the sanctions imposed on Russian giants Rosneft and Lukoil, with concerns mounting over potential supply disruptions if Russia were to retaliate by cutting output or exports.
Investors were also closely monitoring developments in the European Union, where leaders convened to discuss further restrictions against Russia. Notably, there are proposals to utilize frozen Russian assets to support Ukraine’s defense and economic recovery efforts over the coming two years.
Asian stock exchanges bore the brunt of global market unease, with most indices tracking declines from U.S. markets. Japan’s Nikkei 225 index fell by 1.3%, closing at 48,683.84. Investor sentiment was dampened by reports that Prime Minister Sanae Takaichi is set to unveil a substantial economic stimulus package, expected to eclipse last year’s 14 trillion yen ($92 billion). Shares of SoftBank Group also plunged more than 4% following its announcement of new bond offerings aimed at funding AI investments.
Meanwhile, the Shanghai Composite Index in China dropped 0.7% to close at 3,886.19. This decline came on the heels of news that the U.S. might impose tighter export controls on software technologies to China. In Hong Kong, the Hang Seng Index slipped by 0.2% to 25,738.00.
South Korea’s Kospi index fell 0.9%, ending at 3,849.87, as investors remained cautious due to slow progress in trade discussions with the U.S. On a slightly brighter note, Australia’s S&P/ASX 200 managed a marginal gain, up less than 0.1% to 9,032.80, while Taiwan’s Taiex fell 0.4%. Notably, India’s BSE Sensex was an outlier, rising 0.8% amidst the regional downturn.
The pullback in U.S. markets on Wednesday contributed to the negative sentiment across Asia. All three major U.S. stock indexes closed lower, with the S&P 500 down 0.5% to 6,699.40, the Dow Jones Industrial Average dropping 0.7% to 46,590.41, and the Nasdaq Composite losing 0.9%, ending at 22,740.40. The tech sector faced significant declines, particularly after Netflix reported quarterly earnings that fell short of analyst expectations, despite strong subscriber growth.
Conversely, financial stocks exhibited resilience, with Capital One Financial rising by 1.5% and Western Alliance Bancorp gaining 3.2% after reporting better-than-expected earnings, which eased concerns in the banking sector.
The currency markets also felt the pressure, as the Japanese yen continued its downward trend against the U.S. dollar, trading at 152.37 per dollar, down from 151.94 the previous day. This weakness was compounded by Takaichi’s commitment to maintain low interest rates to stimulate growth.
In the commodities market, gold prices saw a slight recovery after declining over the past two days, rising nearly 1% to $4,104.50. This uptick occurred as investors sought safe-haven assets in light of the recent sanctions and market volatility.
Additionally, the stock of Beyond Meat exhibited wild fluctuations during U.S. trading hours, surging over 100% early on before closing down 1.1%. Despite this, it still boasts an impressive gain of over 450% for the week, largely driven by retail traders engaging with so-called “meme stocks.”
