HK stocks retreat amid fears of wider war, rate hike

Asian markets faced a retreat on Thursday as tensions in the Middle East escalated, pushing oil prices above $100 per barrel. This development left investors cautious ahead of US inflation data that could influence monetary policy decisions. In Hong Kong, the Hang Seng Index opened down 289 points, or 1.15%, at 24,985, while the tech index fell 61 points, or 1.39%, to 4,359.

The China Enterprises Index slipped 99 points, or 1.19%, to 8,269. On the mainland, the Shanghai Composite Index opened down 12 points, or 0.31%, at 3,939. The Shenzhen Component Index dropped 82 points, or 0.6%, to 13,641, and the ChiNext Index declined 30 points, or 0.91%, to 3,324. Brent crude futures rose to $101.40 per barrel, exceeding the $100 mark for the first time since July as traders grappled with the potential for inflationary pressures.

Nick Twidale, chief market strategist at ATFX Global, noted that Brent's breach of the $100 level could prompt market participants to reconsider certain positions, especially if a peace deal in the Middle East appears less likely. In Tokyo, the Nikkei suffered a 567-point loss at one point before the lunch hour, after opening 374 points, or 0.57%, lower at 64,768.

In Seoul, the Kospi tumbled to a low of 7,038, down 106 points, or 0.18%, after an initial 12-point, or 0.18%, decline. US producer price and consumer price inflation reports are scheduled for later on Thursday and Friday, respectively. Analysts believe these data points will be crucial in determining whether the Federal Reserve raises interest rates at its September 15-16 meeting.