Asian stocks sank deep into the red Thursday, with markets battered down by 2 percent on average. Japan, Australia and South Korea all closed sharply lower.
U.S. crude oil jumped about $5 a barrel, settling at $136.38 a barrel late New York Wednesday after a report that showed crude inventories declined by 4.6 million barrels last week, more than four times what analysts had expected. Oil has since eased slightly, trading below $136 during the Asian session.
Tokyo's Nikkei 225 Average tumbled 2 percent to hit a two-week closing low, as exporters such as Canon fell on concerns that rising inflation will slow the global economy. Banks also slid after their U.S. peers fell on fresh signs of trouble in the financial sector, while both property developers and shippers extended recent losses.
Seoul shares closed sharply lower after the central bank warned of accelerating inflation following a rate freeze decision, dampening sentiment throughout a rocky afternoon session. The KOSPI shed 2.3 percent to hit a two-month low. The head of the Bank of Korea said its views on the inflation threat were not meant to indicate higher chances of an imminent interest rate increase, but his comments did not stop investors from dumping shares, selling steelmakers and technology issues such as POSCO and Hynix Semiconductor more heavily.