Berliner Boersenzeitung - Stocks fall further as oil spike fans fresh inflation worries

The selling tracked a retreat on Wall Street, where tech firms pulled back from recent gains, having weathered concerns over spiking borrowing costs and geopolitical uncertainty.

Crude had started the week on the back foot thanks to signs that exports from the Middle East were heading back towards pre-war levels and that G7 nations had agreed to tap their stockpiles.

But anxiety returned as figures showed Tehran had increased strikes on tankers in the Strait of Hormuz, Houthis rebutted claims they had lost key territory and top oil officials warned that global reserves were running worryingly low.

And on Wednesday, The Atlantic reported that the White House had asked the Pentagon to draw up options to hit sites in Iran ahead of the midterms, with Trump's Republicans in danger of losing both houses of Congress.

The article said the size and targets were still being discussed, but added that a wider operation could be in the works after the polls on November 3.

It added that even its proponents did not think the attacks would bring Tehran to talks or see Hormuz reopened, but hoped they would show strength leading into the vote.

Both main crude contracts rose more than one percent Thursday, with supplies also hit by the loss of more than 500,000 barrels of Gulf of Mexico output owing to producers shutting up shop as Tropical Storm Isaias approaches.

News that International Energy Agency members were ready to tap more oil from reserves did little to assuage worried traders.

The spike in oil prices fanned inflation fears again and put fresh upward pressure on government bond yields to multi-year highs.

After all three main indexes on Wall Street dropped -- with the S&P 500 and Nasdaq off records -- Asia followed suit.

Tokyo, Hong Kong, Sydney, Singapore, Seoul, Wellington, Taipei and Manila were all well down, though Shanghai edged up as investors returned from a week-long break.

- Tech earnings -

US Federal Reserve officials expect to hike interest rates again before the end of the year, according to minutes of their September meeting, where everyone agreed to the first increase since July 2023.

"With regard to the outlook for monetary policy beyond the current meeting, most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end," the minutes said.

Several participants said they viewed the previous policy rate as not being adequately restrictive of economic activity, while they saw signs of renewed strength in the economy.

Investors are also gearing up for earnings season, with tech firms in the spotlight as questions over their profitability and elevated valuations swirl in light of the vast sums they have pumped into the AI sector.

"The headline earnings numbers may still be very strong. But with expectations elevated, valuations demanding and Treasury yields near multi-decade highs, the investment hurdle has become higher as well," warned Charu Chanana at Saxo Markets.

"This season should therefore be less about simply identifying who beat consensus by the largest amount," she said.

"The stronger businesses may be those that can deliver growth above expectations, convert that growth into cash, fund future investment from a strong balance sheet and still offer enough earnings upside to justify their valuation."

South Korean titan Samsung's shares fell as it forecast a more than 780 percent leap in third-quarter operating profit -- thanks to high memory chip prices -- but missed expectations.

It estimated July-September profit of 107.4 trillion won ($80.3 billion), up 782.5 percent on-year, but analysts on average had tipped 108.7 trillion won.

On currency markets, the euro remains wedged at lows last seen in June last year following another heavy fall amid worries about France's high debt levels, which have spooked bond markets.

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: DOWN 1.0 percent at 69,373.40 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 24,085.59

Shanghai - Composite: UP 0.4 percent at 3,855.96

West Texas Intermediate: UP 1.5 percent at $89.57 per barrel

Brent North Sea Crude: UP 1.8 percent at $101.95 per barrel

Dollar/yen: DOWN at 157.98 yen from 158.07 yen on Wednesday

Euro/dollar: UP at $1.1209 from $1.1194

Pound/dollar: UP at $1.3219 from $1.3210

Euro/pound: UP at 84.79 pence from 84.74 pence

New York - Dow: DOWN 0.7 percent at 51,179.87 (close)

London - FTSE 100: DOWN 0.8 percent at 10,458.50 (close)

(G.Gruner--BBZ)