Asian stock markets mostly moved higher on Wednesday, even as Wall Street slipped, while oil prices dropped after the United Arab Emirates announced it will leave OPEC, dealing a blow to the influential oil group.
U.S. futures showed slight gains, while markets in Japan remained closed for a public holiday.
In Asia, South Korea’s Kospi rose 0.3% to 6,657.40. Hong Kong’s Hang Seng index climbed 1.4% to 26,029.02, and China’s Shanghai Composite index gained 0.3% to 4,091.01.
Australia’s S&P/ASX 200 edged down 0.3% to 8,689.50. Taiwan’s Taiex fell 0.6%, while India’s Sensex added 0.4%.
Oil prices declined in early trading. Brent crude for June delivery fell 0.5% to $110.71 per barrel, while July contracts dropped 0.6% to $103.74. Before the war began in late February, Brent was trading near $70 per barrel. U.S. benchmark crude also slipped 0.6% to $99.32 per barrel.
The UAE is set to leave OPEC on Friday, a move closely watched by global oil markets. The group produces about 40% of the world’s oil, and the UAE is one of its biggest producers. In recent years, the country has pushed back against OPEC’s output limits, seeking to increase its oil exports.
Analysts at ING said the UAE’s exit could boost oil supply, noting the country has long been frustrated by production caps that limit its full capacity.
However, analysts say short-term oil price movements will depend more on whether the Strait of Hormuz reopens. The key shipping route, which previously handled about one-fifth of global oil supply, remains largely closed amid stalled U.S.-Iran talks.
Before the Iran war, the UAE was the third-largest producer in OPEC. ING said its departure could weaken the group’s ability to control global oil supply.
Investors are also watching for progress in U.S.-Iran negotiations. Iran has offered to reopen the Strait of Hormuz if the U.S. lifts its blockade on Iranian ports, but Washington appears unwilling to reach a deal that excludes Tehran’s nuclear programme.
The U.S. Federal Reserve is expected to announce its latest interest rate decision later on Wednesday.
On Wall Street, stocks pulled back from recent record highs on Tuesday. The S&P 500 fell 0.5% to 7,138.80, while the Dow Jones Industrial Average slipped 0.1% to 49,141.93. The Nasdaq composite dropped 0.9% to 24,663.80, led by losses in technology and artificial intelligence-related stocks.
Chipmaker Broadcom fell 4.4%, Nvidia lost 1.6% and Micron Technology dropped 3.9%. Major tech companies including Alphabet, Amazon, Microsoft and Meta Platforms are set to release their earnings later Wednesday.
In currency trading, the U.S. dollar edged up to 159.63 Japanese yen from 159.62 yen. The euro weakened slightly to $1.1708.
The yield on the U.S. 10-year Treasury remained steady at 4.35%.