HONG KONG: Asian markets were mostly down on Friday (Mar 6) as the war in the Middle East showed no sign of ending, though there was some reprieve from the surge in oil prices after the United States looked to ease supply concerns.
After a torrid week on trading floors, investors were limping into the weekend wondering when the US-Israel war on Iran, and Tehran’s attacks across the Gulf region, will come to an end.
Equities across the world have been battered by the crisis, which has sent crude prices soaring by about a fifth since Feb 27 – the day before the attacks started – and fanned fears of a fresh spike in inflation that could hit the global economy.
While there was a midweek bounce, analysts warned that the longer the conflict goes on, the worse it will be for markets to absorb.
“It is too soon to suggest that stocks have bottomed,” wrote IG chief market analyst Chris Beauchamp.
“Unless the war ends soon – and if anything a more intense conflict seems more likely – markets will struggle. Volatility remains elevated, which means we should expect plenty of two-way price action, but a continued decline for the moment seems likely, even with short-term bounces along the way.”
And the battle looks set to be drawn out, with Iranian Foreign Minister Abbas Araghchi warning Thursday that the Islamic republic was neither asking for a ceasefire nor negotiations with the United States.
After a fresh selloff on Wall Street, Asia largely followed suit.
Sydney, Wellington, Taipei, Manila, Mumbai, Bangkok and Jakarta all reiterated while Singapore was flat.
Seoul, which was pummelled almost 19 per cent over Tuesday and Wednesday before bouncing more than nine per cent Thursday, ended flat after recovering an early drop.
London, Paris and Frankfurt all opened slightly higher.
Investors were growing increasingly worried that the spike in crude prices will push inflation back up and force central banks to re-evaluate plans to cut interest rates, with some analysts warning that they could even contemplate hikes.
While Iran has not officially shut off the Strait of Hormuz, shipping through the waterway has all but dried up.
Still, there was some reprieve on the oil front as both main contracts eased – though they later pared the early losses – after US Interior Secretary Doug Burgum said officials were looking at plans to temper the price gains.
He told Bloomberg “everything is being considered”, with options including tapping the country’s reserves, possibly in tandem with other nations.
With that in mind, the White House on Thursday temporarily eased sanctions against Russia to allow its oil currently stranded at sea to be sold to India until Apr 3.
Treasury Secretary Scott Bessent said the waiver was issued “to enable oil to keep flowing into the global market.”
https://www.channelnewsasia.com/business/most-asian-equities-drop-mideast-crisis-rages-though-oil-dips-5976151
