TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search results
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search resultsStocks set for tough week, oil eyes big gains as Middle East war rages
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, US, on March 5, 2026. (Reuters/Brendan McDermid)
A
sia stocks fell on Friday and were headed for their sharpest weekly drop in six years while oil prices were poised for their biggest jump in three in a turbulent week for global markets as the conflict in the Middle East showed few signs of easing.
Investors sought the safety of cash as they sobered up to the fact that the US-Israel war on Iran could drag on longer than initially anticipated.
They also moved to price in more hawkish rate expectations from major central banks, spooked by the prospect of a resurgence in inflation if the spike in energy prices persists.
Yields on US Treasuries have shot up some 18 basis points this week, their most in nearly a year, while the dollar was set for its largest weekly gain in 16 months.
"The range of plausible outcomes [of the war] has expanded to include both the possibility of an exceptionally constructive resolution and a highly destructive one," said Daleep Singh, chief global economist at PGIM Fixed Income.
"Markets are being asked to price a much fatter set of tails with very little reliable information about the likelihood of each, or the path in between."
The war has thus far had the biggest impact on oil prices, with Brent crude futures now trading around $83 per barrel, having been as low as $69 just about a week ago. US crude shot up to a 20-month high earlier this week.
Both are set to clock a rise of more than 15 percent for the week, their largest since February 2022.
"The most market-relevant risk lies in severe escalation or direct infrastructure damage across key Gulf producers, which would likely produce sustained upward pressure on oil, feed into higher headline inflation, tighten global liquidity, and materially raise recession risks," said Klay Group's senior investment team.
High-flying stocks tumble
MSCI's broadest index of Asia-Pacific shares outside Japan last traded 0.4 percent lower and was set to fall 6.6 percent for the week, which would mark its steepest weekly drop since March 2020.
Japan's Nikkei was down 0.5 percent and on track for a 6.5 percent weekly loss, while South Korea's Kospi was also headed for its largest weekly fall in six years with a 10.5 percent slide.
The market rout this week sent even high-flying technology stocks and indexes such as the Kospi tumbling, as investors scrambled to book profits to cover losses elsewhere.
"When the dollar rallies and US yields rise, funding conditions are tightening, which will often exacerbate broader moves particularly if there's leverage involved," said Ben Bennett, head of Asia investment strategy at L&G Asset Management.
US stock futures were steady in Asia on Friday, while EUROSTOXX 50 futures rose 0.6 percent and DAX futures added 0.5 percent.
Dollar is king
The dollar has emerged as one of few winners this week in volatile sessions that have dragged stocks, bonds and, at times, even safe-haven precious metals lower.
The rally in the dollar hit pause on Friday, but it was still on track for a 1.4 percent weekly gain, bolstered by safe-haven demand and reduced US rate-easing expectations.
The euro, which remains vulnerable to a spike in energy prices, was set to fall 1.7 percent for the week, while sterling was similarly headed for a 0.95 percent weekly drop.
Investors are now pricing in about 40 basis points worth of easing from the Federal Reserve this year, down from 56 bps a week ago, while odds for a rate cut from the Bank of England this month have fallen to 23 percent from a near certainty just last week.
The European Central Bank is seen hiking rates by year-end.
The shifting rate expectations have, in turn, pushed up global bond yields, and in Asia on Friday, the yield on the benchmark 10-year US Treasury was steady at 4.1421 percent, having risen some 18 bps this week.
The two-year yield has jumped 20 bps for the week.
Elsewhere, spot gold was steady at $5,078.88 an ounce, though it was headed for a 3.7 percent weekly fall as rising yields and a stronger dollar eclipsed the yellow metal's safe-haven appeal.
