Asian Stocks Plummet as Oil Prices and Rate Hike Bets Fuel Market Anxiety

Hong Kong stocks fell nearly three percent on Friday as investors grew increasingly concerned about surging oil prices and bond yields. The Hang Seng Index reopened after a one-day break to disappointment over the extent of Chinese stimulus measures announced this week.

The rise in fuel costs has pushed up inflation since the start of the US-Iran war at the end of February, fanning rate hike bets and pushing bond yields to levels not seen since the 2000s. FOREX.com's Fawad Razaqzada pointed out that bond markets are now pricing in four further 25-basis-point rate hikes by June 2027.

A below-forecast read on the Federal Reserve's preferred measure of inflation this week helped ease concerns for a second successive lift on October 28, but a strong jobs read could strengthen the case for such a move. The US non-farm payrolls figures later Friday are in focus as traders try to ascertain the Fed's next move.