Asian equities fell on Friday as rising oil prices fueled concerns about inflation and economic stability. The ongoing conflict involving Iran and regional powers has pushed crude prices close to the $100 mark. Investors worry that higher energy costs could disrupt global growth. As a result, markets across the region weakened.
Oil prices remained near multi-month highs during trading. Brent Crude was trading close to $99.85 per barrel, while West Texas Intermediate hovered around $95.05. The prices eased slightly after the United States allowed temporary purchases of Russian oil cargoes stranded at sea. However, the overall outlook remains uncertain.
Regional stock markets mirrored the cautious mood. The MSCI Asia Pacific Index declined 0.5 percent, putting it on track for a weekly loss of about 1.5 percent. Japan’s Nikkei 225 dropped 1.3 percent, while South Korean and Taiwanese equities also slipped. Technology shares led the regional downturn.
Rising oil prices have forced investors to reassess interest rate expectations. Markets had previously predicted significant easing from the Federal Reserve. Now traders expect much smaller cuts due to inflation risks. Bond yields have climbed accordingly.
Currency markets also reflected the shift in sentiment. The US dollar strengthened as investors sought stability during the turmoil. Meanwhile, gold prices moved slightly higher but were still on track for a weekly decline. Investors are now preparing for key central bank meetings scheduled next week.