Global Market Update: Middle East Tensions Impact Oil Prices
Bangkok (AP) — World shares and U.S. futures fell on Tuesday due to escalating conflict in the Middle East, which has caused a surge in oil prices.
A series of Houthi attacks on oil facilities in southern Saudi Arabia has intensified fighting between the country and Iranian-backed rebels in Yemen, a key U.S. ally.
Market Reactions
- In early European trading, Germany’s DAX declined by 0.3%, settling at 25,922.44. The CAC 40 in Paris decreased by 0.2%, reaching 8,291.43. The FTSE 100 in Britain remained nearly unchanged at 10,824.32.
- Futures for the S&P 500 were down by 0.2%, while the Dow Jones Industrial Average futures dropped by 0.7%.
Japanese Market
Tokyo’s Nikkei 225 saw early gains evaporate, falling by 1.7% to 65,269.33, as major exporters were negatively affected by a stronger yen. Notable declines included:
- Toyota Motor Corp.: down 4.1%
- Panasonic Holdings Corp.: down 5.8%
The U.S. dollar weakened against the yen, dipping to 153.86 from 154.34. This gain in the yen’s value comes amid expectations of potential government intervention to stabilize it.
Economic Reports
Japan’s economy reported a revised growth rate for the April-June quarter of 1.4%, up from an earlier estimate of 1.1%, reflecting stronger business investment, though overall investment still contracted by 0.9%.
Norihiro Yamaguchi of Oxford Economics noted that while consumption had been boosted by policy measures, it is expected to fade, leading to increased prices and diminishing consumer purchasing power.
Other Asian Markets
- South Korea’s Kospi fell by 0.6% to 6,954.52.
- Hong Kong’s Hang Seng dropped by 0.4% to 25,317.18.
- The Shanghai Composite index edged up 0.2% to 3,940.55.
China reported a 25% year-on-year increase in exports for August, driven by high demand for automobiles and tech goods.
In Australia, the S&P/ASX 200 decreased by 1% to 8,920.80.
U.S. Market Insights
Last Friday, the S&P 500, Dow, and Nasdaq composite all experienced slight declines. This week, markets await significant inflation updates. The Producer Price Index (PPI) is set to be released on Thursday, followed by the Consumer Price Index (CPI) on Friday, both of which are crucial for understanding price changes affecting consumers and businesses.
Energy Market Trends
In energy markets, Brent crude rose by 1.5% to $98.48 a barrel, while benchmark U.S. crude surged by 2.5% to $93.79 a barrel.
In other currency changes, the euro slipped from $1.1624 to $1.1615.
Contributors to this report include AP Business Writers Chan Ho-him in Bangkok and Yuri Kageyama in Tokyo.
