Asian stocks cautious as Brent falls to $114.48

Japan's Nikkei slips 0.2%, South Korean shares fall 0.5% and US crude declines 2.2% as investors await interest rate decisions and major technology earnings SYDNEY: Asian stock markets traded cautiously on Monday as Brent crude retreated from six-month highs, with investors awaiting central bank decisions and corporate earnings amid concerns over rising energy prices and inflation. Brent futures fell 1.9% to $114.48 a barrel following reports that Qatari mediators visited Tehran on Sunday to help ease regional tensions in coordination with the United States. Brent had gained 6.2% last week, recording its highest weekly close since mid-2022, as Houthi attacks in Saudi Arabia raised concerns over energy supplies. US crude futures declined 2.2% to $101.01 a barrel. Yemen's Houthi group claimed on Monday that it had attacked Saudi Arabia's East-West crude oil pumping stations and Riyadh airport, although there was no immediate confirmation from Saudi authorities. Japan's Nikkei declined 0.2% after losing 4% last week, while South Korea's benchmark index fell 0.5%, extending its monthly losses to nearly 20%. MSCI's broadest index of Asia-Pacific shares excluding Japan remained flat, while Chinese blue-chip stocks dropped 0.5% as the Communist Party began its fifth plenum in Beijing. Chinese equities have now declined for 11 consecutive weeks amid concerns over weak domestic demand despite strong exports. Investors are also preparing for several major central bank meetings this week, with the US Federal Reserve, Bank of Japan and European Central Bank expected to leave interest rates unchanged. Markets are pricing in an 80% probability of a Federal Reserve rate increase in December, while New Zealand's central bank is widely expected to raise rates on Wednesday. Canada is also expected to begin monetary tightening. JPMorgan's global head of economics, Bruce Kasman, said central banks were entering a relatively shallow interest rate increase cycle as they responded to changing economic conditions. US core inflation is expected to remain elevated at 3.1% in September, while economic growth is forecast at an annualised 3.2%, partly supported by investment in data centres. Goldman Sachs analysts expect the Federal Reserve to hold rates at its October meeting before raising them in December, warning that a prolonged energy shock could broaden inflationary pressures. In US futures trading, the S&P 500 gained 0.2% and Nasdaq futures rose 0.1%. European futures also advanced, with EUROSTOXX 50 and Germany's DAX each rising 0.3%, while Britain's FTSE futures gained 0.4%. Investors are awaiting quarterly results from Alphabet, Microsoft and Amazon, with approximately one-third of S&P 500 companies scheduled to report earnings this week. Analysts expect Microsoft to report revenue of $90.6 billion and adjusted earnings per share of $4.73, while Amazon's revenue is forecast at $202 billion with earnings of $1.97 per share. Alphabet is expected to report revenue of $128 billion and earnings per share of $3.00. In Asia, Samsung Electronics and SK Hynix are also scheduled to announce earnings. SK Hynix said it would disclose shareholder return measures on Wednesday following reports of a possible special dividend worth approximately 16 trillion won ($12 billion). US 10-year Treasury yields stood at 4.97%, below their earlier monthly peak of 5.36%. In currency markets, the Japanese yen traded at 156.90 per dollar after gaining around 0.8% last week. The euro rose 0.1% to $1.1220, while sterling held at $1.3346 ahead of Britain's budget announcement on Wednesday. Meanwhile, Brazilian President Luiz Inacio Lula da Silva secured a fourth term in Sunday's election, according to the country's electoral court, although rival Flavio Bolsonaro refused to concede and said he would seek annulment of the result. An exchange-traded fund tracking Brazilian equities in Tokyo declined 15%. Gold prices rose 0.4% to $4,012 an ounce after falling more than 4% last week.