Asia frets on Middle East risks, looming China data
By Wayne Cole
SYDNEY (Reuters) — Asian shares stuttered on Wednesday as a blast at a Gaza hospital dealt a blow to hopes for containing the crisis, while bonds nursed heavy losses as strong U.S. retail data argued for a punishingly long stretch of high rates.
Israeli and Palestinian authorities were trading blame for the blast that killed hundreds at the hospital, complicating U.S. President Joe Biden's already fraught trip to the region.
The news contributed to a spike in oil prices as investors worried Iran or other nations could get pulled into the conflict.
«We judge the risks are tilted towards escalation and spread of the Israel-Hamas conflict to other countries in the Middle East,» warned analysts at CBA in a note. «A major spike in volatility and a downgrade of the global economic growth outlook is possible.»
The threat to the global economy comes just as China is set to release data likely showing annual economic growth slowed sharply in the third quarter to around 4.4%.
Figures for retail sales and industrial output for September will also offer insight into whether activity is finally responding to Beijing's recent stimulus measures.
The cautious mood left MSCI's broadest index of Asia-Pacific shares outside Japan a shade lower, while Japan's Nikkei dipped 0.1%.
S&P 500 futures and Nasdaq futures both eased 0.2% in early trade.
They were dragged in part by a drop in Nvidia (NASDAQ:NVDA) after news the Biden administration plans to halt shipments to China of more of its advanced artificial intelligence chips.
Markets are now anxiously awaiting earnings from Netflix (NASDAQ:NFLX) and Tesla (NASDAQ:TSLA) later in the session.
Stocks were also pressured by a jump in bond yields after a barnstorming report on
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