Asian markets slide on AI rout, oil surges on Middle East risks

Mettis Global reported that Asian bourses declined on Monday, with artificial intelligence-linked stocks leading the retreat. Japan's Nikkei dropped 0.8 per cent, while South Korea's benchmark fell 2.1 per cent after the chiefs of OpenAI and Anthropic called for a slower rate of AI development to contain its risks. Sam Altman of OpenAI and Dario Amodei of Anthropic urged more caution, pointing to dangers from AI and the need to protect humanity.

Oil prices climbed as fresh attacks tied to Saudi Arabia and Gulf shipping heightened worries about global energy supplies. Brent crude rose 2.6 per cent reaching $107.36 per barrel after a gain of nearly 9 per cent last week, while US crude climbed 2.4 per cent to $102.48. A Saudi pipeline outage, plus further disruption threatened by Yemen's Houthis, has deepened fears of prolonged strain on crude supplies. A meeting in Oman that was to bring Iran and Gulf Arab states together on a possible arrangement for the Strait of Hormuz was postponed.

After a hotter than expected US inflation reading on Friday, traders now put the likelihood of a 25-basis-point Fed increase on Wednesday at 86 per cent. Investors are also wagering on another increase before December, a step that would be the first US rate rise since mid-2023.