HONG KONG - Most Asian stock markets struggled again Tuesday as oil prices extended gains and investors bet on a Federal Reserve interest rate hike this week, though tech firms saw a slight recovery from a sell-off fuelled by fears over the AI boom.
With the crisis in the Middle East showing few signs of abating and Yemen's Houthi rebels taking control of a crucial outlet for shipping, crude has spiked this month to more than $100 a barrel, ramping up global inflation worries.
Both main contracts climbed more than one percent Tuesday.
The group, fighting the Saudi-backed, internationally recognised government, last week seized control of Yemen's Red Sea coast and the Bab al-Mandab Strait, which has become vital as the wider US-Iran war chokes the Strait of Hormuz.
Riyadh, meanwhile, shut its East-West pipeline at the weekend following drone attacks by the Houthis.
The rally in crude prices was pared slightly on Monday when US President Donald Trump said on Truth Social: "The failing Nation of Iran wants to make a deal, quickly and badly.
"I will determine whether or not the U.S.A. will choose to engage - The concept of which we are open to."
The surge in energy costs -- US diesel used in transport and agriculture topped $6 a gallon Friday -- has ramped up pressure on central banks to temper a surge in inflation.
The 10-year US Treasury yield was sitting just below five percent, having topped that level Monday for the first time since October 2023.
With the European Central Bank lifting rates last week, focus is now on the Fed, with traders pricing a more than 90 percent chance that it will also hike.
After a selloff on Wall Street's three main indexes, Asia mostly retreated.
Hong Kong, Shanghai, Sydney, Singapore, Wellington and Taipei all dropped.
But Tokyo, Seoul and Manila edged up.
Samsung and SK hynix edged up in Seoul, while Kioxia and SoftBank enjoyed healthy gains in Tokyo, though they did not recover all Monday's losses.
- AFP