SINGAPORE: Asian stocks fell for a second day on Thursday as lacklustre earnings from tech megacaps deepened a selloff on Wall Street, while US sanctions against Russia and possible new export controls on China revived geopolitical worries.
Oil prices surged 3% after the US imposed sanctions on major Russian companies Rosneft and Lukoil over the Ukraine war.
MSCI’s broadest index of Asia-Pacific shares outside Japan was last off 0.4%, while Japan's Nikkei 225 sank 1.5%.
Chinese stocks fell as much as 1.1% after sources said the White House is considering a plan to curb an array of software-powered exports to China to retaliate against Beijing's latest round of rare earth export restrictions.
"With no fresh macro data to anchor sentiment, investors are leaning defensive while Trump’s Asia visit next week stirs geopolitical nerves," said Charu Chanana, chief investment strategist at Saxo Bank in Singapore.
"The chatter around US software export curbs to China has hit tech sentiment right where it hurts, and renewed sanctions on Russia are a reminder that geopolitical risks aren’t going away either."
Global equity markets are easing off record highs as corporate earnings season kicks off and investors take profits. While results or outlooks from megacaps have disappointed investors, most of the companies that have reported so far have beaten analysts' estimates.
South Korean stocks fell 0.7% amid a broad decline for tech hardware manufacturers. The Bank of Korea kept rates on hold, as expected by analysts polled by Reuters.
Brent crude was last up 2.9% at $64.41 per barrel after US President Donald Trump imposed Ukraine-related sanctions for the first time in his second term, targeting Rosneft and Lukoil.
"When it comes to the sanctions, it's a negative for the region," said Kyle Rodda, senior market analyst at Capital.com in Melbourne. "Most Asian economies are net energy importers and this just inhibits growth and is a marginal driver of inflation."
Sources said privately-owned Reliance Industries - India's largest buyer of Russian oil - plans to sharply cut those imports due to EU and US sanctions, with other Indian refiners likely to make massive reductions as well.
S&P 500 e-mini futures edged up 0.1% after a second day of declines for US stocks overnight as earnings reports from tech megacaps underwhelmed analysts on Wall Street.
Netflix shares fell more than 10% after a weak outlook, while Tesla dropped 3.8% post-earnings despite record third-quarter revenue. Apple slid 1.6% after facing a complaint to EU antitrust regulators over its App Store terms.
The yield on the US 10-year note was 3.9549%, little changed from Wednesday. Investors expect a 25-basis point rate cut at the Federal Reserve’s October 29 meeting, with futures pricing a 96.7% probability, according to the CME Group’s FedWatch tool.
The US dollar index was 0.1% firmer at 99.062. Gold slipped 0.2% to $4,086.73 per ounce as investors booked profits ahead of US inflation data due this week. — Reuters
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