Asian stocks fall on Middle East unrest

US stocks ended sharply lower on Wednesday as elevated treasury yields weighed, with investors assessing the latest batch of quarterly corporate results and forecasts.

Investors in Asia will focus on earnings from Taiwan Semiconductor Manufacturing Co Ltd (TSMC) later in the day when the company is expected to report a 30% slump in third-quarter profit. Analysts though predict robust growth next year as the chip industry emerges from its current downturn.

Tesla CEO Elon Musk said on Wednesday that he was concerned about the impact of high interest rates on car buyers as the company missed Wall Street expectations on third-quarter gross margin, profit and revenue.

Meanwhile, Federal Reserve policymakers are signalling a pause in hiking interest rates for another couple months.

“I believe we can wait, watch and see how the economy evolves before making definitive moves on the path of the policy rate,” Fed governor Christopher Waller told the European Economics & Financial Centre (EEFC) Seminar in London.

The spotlight will now be on Fed chair Jerome Powell, who is due to speak later on Thursday.

A Reuters poll of economists indicated that the Federal Reserve will keep its key interest rate on hold on November 1 and may wait longer than previously thought before cutting it.

While a slight majority still see a cut before the middle of 2024, a significant minority of forecasters, about 45%, now see no rate reduction until the second half of next year or later, up from 29% in the last poll.

The yield on 10-year treasury notes was up 5.1 basis points (bps) to 4.953%. The yield on the 30-year treasury bond was up 3.8bps to 5.032%.

In the currency market, the dollar index, which measures the US currency against six rivals, rose 0.019%. The Japanese yen strengthened 0.10% to 149.79 per dollar.

In commodities, oil prices eased on Thursday, reversing gains in the previous session, after Opec showed no signs of supporting Iran’s call for an oil embargo on Israel and as the US plans to ease Venezuela sanctions to allow more oil to flow globally.

US crude fell 0.27% to $88.08 a barrel and Brent was at $90.90, down 0.66% on the day.

Spot gold was at $1,948.16 per ounce, just shy of $1,962.39 its highest since August 1 touched on Tuesday.

Reuters