Asian Stocks Fall in Wake of Iran Attack on Israel: Markets Wrap – FinaPress

(Bloomberg) — Shares in Asia slipped Monday, tracking a fall in US equities, as markets grappled with ratcheting tensions after Iran’s unprecedented attack on Israel on the weekend.

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Equity benchmarks in Japan, South Korea and Australia all declined while Hong Kong stock futures also fell. Contracts for US shares edged higher in Asia after the S&P 500 suffered its worst session since January on Friday amid a flight to safety.

With investors already rattled by sticky inflation and the prospect of higher-for-longer rates of interest, the escalation of the Middle East crisis risks injecting fresh volatility into markets. Since the conflict widens, many say oil could surpass $100 a barrel and expect a flight to Treasuries, gold and the dollar, along with further stock-market losses.

Most Group-of-10 currencies strengthened against the greenback Monday while Treasures steadied in early Asian trading after yields slipped throughout the previous session. Gold rose amid driving demand for haven assets, while aluminum jumped greater than 6% after US-imposed sanctions on Russian trading.

“The escalated tension over the weekend has unfortunately introduced latest bitter uncertainties for the financial world to digest,” said Hebe Chen, an analyst at IG Markets. In Asia “the financial and tech sectors may experience the deepest pain — higher energy prices usually tend to darken the shadow on the inflation trajectory, resulting in higher rates for an prolonged period.”

In Asia, Chinese equities are set for a difficult week after a miss throughout the nation’s trade data Friday. Even when the worldwide risk mood improves and Middle East tensions subside, Chinese stocks might even see headwinds of their very own to beat.

Elsewhere, developer China Vanke Co. said it’s planning to resolve liquidity pressure and short-term operational difficulties as China’s top leaders have grown increasingly alarmed with regard to the country’s protracted real estate crisis and its effect on the sluggish economy.

War Nerves

While Iran said “the matter is perhaps deemed concluded,” traders in the meanwhile are waiting to see if the conflict spirals right right into a widespread regional war. Still, nerves may be tempered following a report that President Joe Biden told Israeli Prime Minister Benjamin Netanyahu that the US won’t support an Israeli counterattack against Iran.

“For markets this will likely increasingly eventually play out as a fade as Iran and Israel step back from the brink,” said Namik Immelbäck, chief strategist at Skandinaviska Enskilda Banken AB. “But near term this might lead to position reduction from especially trend following quant strategies” which should exacerbate the usual flight to safety, he said.

Read More: Iran’s Attack on Israel Sparks Race to Avert a Full-Blown War

Bitcoin rallied after it sank almost 9% throughout the wake of the attacks on Saturday. Stock markets in Saudi Arabia and Qatar posted modest losses under thin trading volumes on Sunday. Israel’s equity benchmark fluctuated between gains and losses in any case nine times before closing with a small gain.

Oil shrugged off Iran’s the attacks, with gains held in check by speculation that the conflict would remain contained. Brent crude is already up almost 20% this yr and last traded around $90 a barrel.

Traders will soon shift to looming economic data as they refine bets on central bank easing cycles, along with the International Monetary Fund and World Bank spring meetings in Washington. This week, Chinese growth data and Japan, Eurozone and UK inflation readings are due.

Key events this week:

Eurozone industrial production, Monday
US retail sales, empire manufacturing, business inventories, Monday
Federal income taxes due throughout the US, Monday
IMF and World Bank spring meetings start in Washington, Monday. The essential ministerial meetings is perhaps held April 17-19
Canada CPI, Tuesday
China property prices, retail sales, industrial production, GDP, Tuesday
UK jobless claims, unemployment, Tuesday
Latest Zealand home sales, CPI, Wednesday
Eurozone CPI, Wednesday
UK CPI, Wednesday
Australia unemployment, Thursday
Japan CPI, Friday
India’s elections begin, Friday