The Swiss Market Index (SMI) was expected to open 0.1% lower at IG Bank pre-market on Thursday, following Wednesday's 1.8% close — its largest loss in months. Investors braced for US inflation data, upcoming ECB and Federal Reserve policy decisions, and continued geopolitical tension in the Middle East.
Asian equities came under pressure from escalating conflicts and rising energy costs. The Nikkei fell 0.8% to 64,597.46, while the broader Topix dropped 0.3% to 4,032.89. Chinese markets also retreated: the Shanghai Composite lost 0.1% to 3,946.28, and the combined Shanghai-Shenzhen index slipped 0.2% to 4,564.87. Japan's Bank of Japan fuelled speculation of near-term rate hikes, adding to market unease. Wataru Akiyama, strategist at Nomura Securities, said rising crude prices and interest rates were acting as a brake on Japanese equities. Nintendo shares fell 5.8%, and cable-makers Fujikura and Furukawa Electric also weakened. Banks and securities firms gained, along with oil and coal sectors.
In China, UBS announced it would close its Shenzhen-based fund distribution unit — established in 2022 — by the end of September, citing an overly competitive market.
Prashant Newnaha, strategist at TD Securities, noted that bond markets were under pressure as oil prices rekindled inflation fears. Agricultural commodities were breaking out, he added, likely pushing consumer prices higher in coming months.
In currency markets, the dollar rose fractionally to 153.51 yen and 6.7080 yuan. Against the Swiss franc it traded at 0.8090, down 0.1%. The euro held near 1.1636 dollars and rose to 0.9414 francs ahead of the ECB's rate decision this week. The yen gained on expectations that the BOJ would 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 psychological threshold for a second session, having surpassed $100 for November delivery for the first time since July. West Texas Intermediate rose 0.2% to $96.22. Escalating fighting between Saudi Arabia and Houthi rebels in Yemen continued to underpin prices.
US markets extended Wednesday's losses. The Dow Jones Industrial dropped 0.77% to 52,380.66, reaching its lowest level since late July. The S&P 500 fell nearly 0.5% to 7,636.36. The Nasdaq 100 was more resilient, losing just 0.29% to 29,421.55.
Meta surged 6.6% after announcing "Muse," a new AI assistant, which lifted investor appetite for artificial-intelligence bets. Marvell Technology, AMD, SanDisk and Micron rose between 1.5% and 4.3%. Alphabet fell more than 2% as Meta's AI agent directly competes with Google's Gemini. Apple dipped on lacklustre reaction to its foldable iPhone announcement. Chevron and ExxonMobil gained up to 2.2%, buoyed by high oil prices.
Among smaller US movers, Casey's dropped more than 14% on weak volume concerns, while ServiceTitan tumbled 30% after disappointing quarterly revenue guidance. Traders positioned cautiously ahead of ECB rate policy, US price data, and fourth-quarter results from Oracle and Adobe.
(cash/AWP/Bloomberg/Reuters)
