Bangkok — The US and Israeli attacks on Iran rocked global markets on Monday, with US futures falling more than 1% and oil prices rising, although gains by defense contractors and oil companies helped limit losses in Asian trading.
S futures contracts&The P 500 and Dow Jones Industrial Average fell 1.7%.
The price of a barrel of US crude jumped by 9% to reach $73 per barrel. Brent crude jumped about 10% to about $80 per barrel.
European markets opened sharply lower. Germany’s DAX index fell 2.2% to 24,737.47, while in Paris, the CAC 40 index lost 1.9% to 8,413.91. Britain’s FTSE 100 index fell 1% to 10,800.63.
Stocks fell in most Asian markets but rose in Shanghai, where rising oil prices lifted the shares of some oil companies such as CNOOC and China Petroleum. & Chemicals and PetroChina up to 10%.
The Shanghai Composite Index rose 0.5% to 4,182.59, while in Hong Kong, the Hang Seng Index lost 2.1% to 26,059.85.
Japan’s Nikkei 225 initially fell more than 2%. It closed down 1.4% at 58,057.24 points. As other losses were offset, shares of defense-related stocks, including Mitsubishi Heavy Industries and IHI Corp, rose.
Australia S&The P/ASX 200 index ended flat at 9,200.90.
In India, which may face disruptions to its access to oil due to hostilities, the Sensex fell by 2.1%.
Taiwan’s index lost 0.9% and Singapore’s index fell 2.3%. In Bangkok, a major tourist destination in the Middle East, the SET index fell by 3.1%.
Markets in South Korea were closed for holiday.
The price of gold, which is usually seen as a safe haven for investment in times of uncertainty, rose by 3.4% to about $5,426 per ounce.
The US dollar also rose to 157.20 Japanese yen from 156.27 yen late Friday. The euro fell to $1.1708 from $1.1762.
Traders are betting that the war will disrupt oil supplies from Iran and elsewhere in the Middle East. Attacks throughout the region, incl Two ships traveling through the Strait of HormuzThis, with the narrow mouth of the Persian Gulf, has restricted oil exports to the rest of the world.
“Nearly a fifth of global oil and LNG flows pass through the Strait of Hormuz,” Stephen Innes of SPI Asset Management said in a commentary. “This is not a mysterious channel. It is the aorta of the global energy system.”
It is likely to lead to a protracted war Higher prices For other fuels and gasoline, it can spread throughout the global economy, increasing overall production costs.
Prolonged disruptions to oil flows across the Middle East would have “devastating consequences for oil and LNG and every market everywhere if they happen. Energy is the input to all production,” RaboResearch Global Economics & Markets said in a report.
Iran exports approximately 1.6 million barrels of oil per day, most of it to China. It may need to look for supplies elsewhere if Iranian exports are disrupted, another factor that could lead to higher energy prices.
The size of China’s strategic oil reserves is a state secret. But a recent report by John Kemp of Peace Research put it at between 1.1 billion and 1.2 billion barrels — the equivalent of about 100 days, or just over three months, of imports.
The impact of the war on the markets was somewhat weak because the attacks were expected, in light of the massive buildup of US forces in the Middle East. So traders adjust their positions to take this risk into account.
The conflict has shifted attention, for now, away from the issues surrounding artificial intelligence that have dominated markets in recent months.
On Friday, S&The P 500 fell 0.4% to end only its second losing month in the last 10. The Dow Jones Industrial Average fell 1.1%, and the Nasdaq Composite fell 0.9%.
Treasury yields fell in the bond market as investors sought safer places for their money.
“When markets are fragile, they don’t need a knockout,” Innes said. “They just need another weight on the bar.”
Also hurting the overall market was a report released on Friday that showed that wholesale inflation in the United States reached 2.9% last month, much higher than the 1.6% that economists had expected.
This could put pressure on the Fed to do so Postpone longer on their discounts to interest rates. Lower interest rates would give a boost to the economy and investment prices, but risk worsening inflation.