BANGKOK (AP) — European stock markets opened positively on Wednesday, despite a rough day in Asia. South Korea saw its benchmark index plunge over 12%. U.S. futures were down by 0.3%.
Oil prices rose more than 3% as the conflict involving the U.S. and Israel against Iran intensified. This situation has raised concerns among investors about the future of global oil prices and economic stability.
Francis Lun, CEO of Venturesmart Asia, expressed his worries: “The Iran situation is getting out of hand… President Trump miscalculated enormously. The situation is very grim.”
In Europe, shares showed signs of recovery. Germany’s DAX climbed 0.2%, while Paris’s CAC 40 remained steady. However, Britain’s FTSE 100 dropped slightly.
In Asia, South Korea’s Kospi index faced heavy losses, falling 12.1%. Despite advancements in AI technology benefiting companies like Samsung and SK Hynix, energy security concerns overshadowed optimism.
Trading was temporarily halted on the Korea Exchange when the Kospi fell sharply. South Korea’s economy is heavily reliant on oil and trade, making it vulnerable to disruptions in the Strait of Hormuz, which is crucial for global oil transport.
President Trump announced plans to enhance maritime security, stating that the U.S. Navy might escort tankers through the Strait of Hormuz. “If necessary,” he said, “the U.S. will ensure the safety of maritime trade.” Despite these measures, oil prices have seen a significant hike, with U.S. crude hitting $77.18 per barrel, marking a 15% increase since the conflict began.
Mizuho Bank noted that while the U.S. measures offer some support, the “war premium” on oil prices persists. They predict shipping costs could rise by an additional $5 to $15 a barrel.
Stocks across Asia fell significantly, with the Nikkei 225 dropping 3.6%. Countries like Japan and Taiwan depend heavily on oil imports from the Persian Gulf.
In the U.S., the S&P 500 faced a 0.9% loss, reflecting fears about the war’s effects on the economy. Analysts suggest that if the conflict continues, higher fuel prices could hinder any plans by the Federal Reserve to cut interest rates.
Gasoline prices in the U.S. have spiked to an average of $3.11 per gallon, rising 11 cents recently. European and Asian drivers are facing long lines at gas stations, while the U.S., being a net oil exporter, doesn’t face immediate shortages.
Overall, as global markets react to these shifts, the mixed responses from investors highlight the uncertainty surrounding economic conditions amid international tensions.
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