Asian stocks slide, Binance hack rattles crypto markets

Summary:

• Equities: Asian stocks declined as poor Amazon and Intel reports heightened unease about AI spending. After a sidecar stopped programme trading, the KOSPI lost 4.9%; the Nikkei dropped 2.5%, and the Hang Seng climbed 1.4%.
• Bonds: US government bonds strengthened, pushing the 10-year yield down to roughly 4.90%, the lowest in a month.
• BoJ: The Bank of Japan left its rate at 1.25% in an 8-1 decision, with Takata voting for a hike. It judged underlying inflation to be consistent with its 2% goal and will more than double ETF sales from 2027. The yen edged up.
• Oil: Oil prices moved higher after a ship fire in the Strait of Hormuz, though diplomacy hopes capped the gains. Ukraine is said to have halted strikes against refineries.
• Crypto: Binance halted deposits and withdrawals after an apparent hack and promised to cover losses. Roughly $2.5 billion was frozen. BNB lost 8.6% and bitcoin slid to around $77,700.

Asian stock markets dropped steeply on Friday, with South Korea leading the decline, after dour reports from Amazon and Intel intensified worries about the price tag of the AI wave. A possible hack at crypto exchange Binance shook digital currencies, while the Bank of Japan showed increasing conviction that inflation is at its objective.

South Korea took the heaviest hit. After KOSPI 200 futures lost 5%, the Korea Exchange put a sidecar into effect on the KOSPI, freezing programme trading for five minutes. The KOSPI ended 4.9% lower and the KOSDAQ slid 4.3%. Japan's Nikkei declined 2.5%, China's Shanghai Composite eased 0.8%, and Hong Kong's Hang Seng went against the grain, gaining 1.4%. Globex trading also showed US equity index futures moving lower.

The selling pressure came from US results published after the close on Thursday. Amazon's stock slipped about 7% in extended trading, with the company projecting holiday-quarter revenue beneath forecasts. Intel tumbled roughly 18% after giving soft fourth-quarter guidance and cautioning that PC demand is weakening. The decline fanned out to AI cloud vendors, PC manufacturers and chipmakers. Treasuries gained as investors moved into safe assets, pushing the 10-year yield down to roughly 4.90%, the lowest level in over a month.

Japan's central bank left its policy rate at 1.25% on an 8-1 vote. Board member Hajime Takata was the dissenter, seeking a rise to 1.5%. In its quarterly Outlook Report, the BoJ said underlying inflation is now broadly aligned with its 2% target. It called price risks tilted to the upside and lifted its core inflation projection for fiscal 2027 to 2.6%. The bank also agreed to more than double the speed of its ETF sales starting January 2027. The yen strengthened a little after the decision. Earlier data showed Tokyo's core inflation at 2.6% in October, matching forecasts. Attention later in the day turns to Governor Kazuo Ueda's press conference for hints about a possible December rate increase.

The United Kingdom Maritime Trade Operations agency reported a fire on a vessel in the Strait of Hormuz after an incident northeast of Oman and said the cause was unknown; oil prices gained. But gains were held in check by fresh hopes for a diplomatic settlement of the Middle East conflict after a letter from Vane. The Wall Street Journal said Ukraine has halted attacks on Russian oil refineries under US pressure. There is also unverified speculation that US President Donald Trump might restart military action against Iran following next week's midterm elections. In a separate move, ANZ lifted its Brent forecast for year-end to $105 a barrel.

In digital assets, Binance halted all deposits and withdrawals following a suspected hack, with on-chain data indicating billions of dollars had flowed out of its hot wallets on multiple blockchains. Estimates have put the outflows at between roughly $2 billion and over $3 billion. Co-founder Changpeng Zhao stated that the exchange seemed to have been compromised and that user money was secure, and Binance promised to pay for all losses. The platform said approximately $2.5 billion has been frozen but did not specify the amount lost or when services would resume.

Tether and Circle, the stablecoin companies, were quick to freeze tokens connected to the outflows, reportedly acting about 40 minutes after the withdrawals started. More than $1 billion, largely ether, was said to be unrecoverable. BNB, Binance's token, declined 8.6% to about $694, while bitcoin eased to approximately $77,700.