The SMI was expected to fall 0.1% at open on Thursday, following Wednesday's sharp 1.8% decline, as fear of an expanding Middle East conflict and surging oil prices continued to weigh on global risk sentiment.
Asian equities retreated on geopolitical tensions after Iran attacked ten ships near the Strait of Hormus and the US sank five Iranian oil tankers. The 225-stock Nikkei dropped 0.8% to 64,597.46, while the broader Topix fell 0.3% to 4,032.89. Chinese markets were also cautious: the Shanghai index lost 0.1% to 3,946.28 and the Shanghai-Shenzhen composite fell 0.2% to 4,564.87. "For the Japanese stock market overall, rising crude prices and rates act as a brake," said Wataru Akiyama, strategist at Nomura Securities. Nintendo fell 5.8%, while cable makers Fujikura and Furukawa Electric also gave back ground; banks and the oil and coal sectors outperformed.
Investors were also weighing the outlook for US monetary policy ahead of pending inflation data. "The bond market is under pressure as oil prices are rekindling inflation fears," said Prashant Newnaha, strategist at TD Securities. Agricultural commodities also broke higher, adding to concerns about consumer price pressures in coming months.
In forex, the dollar gained slightly to 153.51 yen and rose to 6.7080 yuan. Against the Swiss franc, it traded 0.1% lower at 0.8090. The euro held steady near the European Central Bank's upcoming rate decision at 1.1636 dollars and 0.9414 francs. The yen edged higher on expectations the Bank of Japan will raise rates next week to combat inflation.
Oil remained firmly above the $100 mark. Brent crude fell 0.2% to $101.03 a barrel but stayed above the psychologically key level, supported by fears of supply disruptions as the Saudi Arabia-Houthi conflict in Yemen escalated. US WTI crude rose 0.2% to $96.22 a barrel.
US equities extended their slide. The Dow Jones Industrial Average fell 0.77% to 52,380.66, marking its lowest level since late July. The S&P 500 dipped nearly 0.5% to 7,636.36. The Nasdaq 100 shed 0.29% to 29,421.55, proving more resilient but still unable to overcome broad weakness.
The standout performer was Meta, whose shares surged 6.6% on the launch of its AI assistant "Muse." A Mizuho Securities analyst noted investors wanted to see AI investments paying off, calling the move "a step in the right direction." Chip and memory stocks also rallied — Marvell Technology, AMD, SanDisk and Micron rose between 1.5% and 4.3%. However, most big tech names closed in the red: Alphabet fell more than 2% on competitive concerns with Google's Gemini, and Apple slipped after its foldable iPhone announcement failed to excite.
US oil producers gained: Chevron and ExxonMobil rose up to 2.2% as November Brent crude cost more than $100 a barrel for the first time since July. On the small-cap side, Casey's dropped more than 14% on volume concerns, and ServiceTitan cratered 30% after disappointing quarterly revenue guidance, with one market voice noting that scaling an AI agent is slowing.
