Asian indices like the Hang Seng, Nikkei 225, Shanghai Composite, and Kospi retreated on Thursday, erasing some of the gains made on Wednesday as optimism about talks between the United States and Iran rose.
Hang Seng, Nikkei 225, Shanghai Composite, and Kospi are retreating
Top Asian indices resumed their downtrend on Thursday. Data shows that the Nikkei 225 Index dropped by 150 points, while the Hang Seng, Shanghai Composite, and Kospi fell by 350, 30, and 150 points, respectively.
Similarly, futures tied to American indices like the Dow Jones, S&P 500, and Nasdaq 100 dropped modestly, while European indices like the DAX, FTSE 100, and CAC 40 resumed their downtrend.
Asian stocks resumed falling as crude oil prices jumped. Data shows that Brent and West Texas Intermediate (WTI) rose to $99 and $92, respectively.
Natural gas prices also resumed the uptrend.
This performance is happening as investors remain concerned about the ongoing war in Iran.
For one, the expectation is that this war will last longer than expected, as the disagreements between the US and Iran are still far from being resolved.
The US has sent a list of 15 points to Iran, including its ending its support for proxies, its nuclear program, and limiting its ballistic missile program. Iran will never accept these demands.
On the other hand, Iran has sent a list of five demands, including the closure of US bases in the Middle East, sovereignty on the Strait of Hormuz, and reparations.
Therefore, analysts believe that the war will continue for longer, which explains why the United States is sending troops to the region. Also, Israel has committed to continuing to fight even when the US exits.
A prolonged war will have a major impact on Asian countries like Japan and South Korea, which rely on oil and gas imports from the Middle East.
Top movers in Asian markets
Most companies in the region were in the red on Thursday as investors embraced a risk-off sentiment.
China Life Insurance, Semiconductor Manufacturing International, Ping An Insurance, and Meituan stocks were among the top laggards in the Hang Seng Index, falling by over 3%.
Meituan stock dropped by 3%, erasing some of the gains made on Wednesday when China vowed to fight price wars in the country.
Meanwhile, China Life Insurance, Sanan Optoelectron, New China Life, China Pacific Insurance, and Ping An dropped by over 3.7% and were among the top losers in the Shanghai Composite Index.
Similarly, many big names in Japan’s Nikkei 225 Index were in the red, with Ricoh, Daiichi Sankyo, Toto, Toho Zinc, Ebara, Chiba Bank, and Trend Micro being the top losers.
Japan stocks dropped after a report showed that foreign investors continued selling assets last month.
They sold foreign bonds worth over ¥635 billion ($3.9 billion) and stocks worth over ¥2.5 trillion ($15.7 billion) worth of stocks.
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