- Asian shares drop on U.S. recession concerns
- Oil prices drop on higher U.S. inventories
- Qatar’s index adds 1.7 percent
- Dollar, gold rose
Asian shares retreated in early trading on Thursday as growing fears about a recession in the United States weighed on investor sentiment.
Cautious remarks late last week by the U.S. Federal Reserve sent 10-year treasury yields to the lowest since early 2018, triggering concerns about a potential U.S. recession.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.3 percent and Japan’s Nikkei fell 1.7 percent.
Worries that the inversion of the U.S. Treasury curve signaled a future recession only deepened as 10-year yields fell to a fresh 15-month low at 2.34 percent.
“We think that the ongoing flattening, or outright inversion, of the curve is a bad sign for equities, as it usually has been in the past,” Oliver Jones, markets economist at Capital Economics, told Reuters.
“Arguments that the yield curve is no longer a reliable indicator seem to resurface every time it inverts, only to be subsequently proved wrong.”
Oil prices dropped on Thursday after the U.S. Energy Information Administration said that U.S. crude inventories rose last week by 2.8 million barrels, compared with analysts’ expectations for a decrease of 1.2 million barrels. Crude exports fell by 506,000 barrels per day, the EIA said.
International Brent crude oil futures were at $67.63 a barrel at 0045 GMT, down 20 cents, or 0.3 percent, from their last close. Brent closed down 0.2 percent on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures were at $59.18 per barrel, down 23 cents, or 0.4 percent, from their last settlement. WTI fell 0.9 percent on Wednesday.
“Today’s fall does not derail the short-term bullish argument that both the OPEC+ production cuts and supply outages will outweigh the global growth concerns and rising U.S. production,” Edward Moya, senior market analyst, OANDA, told Reuters.
Middle East markets
Qatar’s stock market index was the best performer in the region on Wednesday, adding 1.7 percent with 18 of 20 stocks increasing.
Qatar Fuel added 4.2 percent and Mesaieed Petrochemical was up 5.8 percent, as both companies were lifted by shareholder approval for an increase in foreign ownership limits.
Saudi Arabia's index added 1 percent with Al Rajhi Bank gaining 2.3 percent and National Commercial Bank, the country's largest lender, rising 2.9 percent.
Dubai's index was flat, with its largest listed-developer Emaar Properties sliding 1.7 percent.
The Abu Dhabi index slipped 0.3 percent with the country's largest lender First Abu Dhabi Bank losing 0.8 percent and Emirates Telecommunications Group dropping 0.2 percent.
The Egyptian blue-chip index EGX30 dropped 0.6 percent, led by a 2.2 percent decline in Egypt's largest lender Commercial International Bank and a 4.5 percent fall in El Sewedy Electric.
Kuwait’s premier market index rose 0.9 percent, Oman’s index edged 0.1 percent lower and Bahrain’s index added 0.4 percent.
The dollar rose early on Thursday.
The dollar index, which measures the greenback against a basket of six major currencies, was 0.17 percent higher at 96.942 and headed for its third day of gains.
Gold prices rose as equities dropped.
Spot gold was 0.1 percent higher at $1,310.48 per ounce.
U.S. gold futures were down 0.1 percent at $1,308.50 an ounce.
(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)
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