BANGKOK (AP) — The Nikkei 225 index in Japan dropped over 5% on Monday, while other Asian markets also felt the impact. This decline came after oil prices surged to nearly $120 per barrel, raising concerns for economies heavily reliant on imported oil and gas.
In the U.S., futures for major indices like the S&P 500 and Nasdaq fell more than 1% in early trading. This followed a significant drop on Sunday night.
Conflict in the Middle East added to the uncertainty. Zhai Jun, a special envoy from China, condemned attacks that hit civilian areas. Meanwhile, South Korean President Lee Jae Myung cautioned against panic buying and urged a responsive approach to the market fluctuations.
Oil prices climbed sharply due to recent strikes in the region, with Bahrain accusing Iran of hitting crucial water facilities. In retaliation, Israel targeted oil depots in Tehran.
The Nikkei 225 edged down by 5.2% to 52,728.72, and South Korea’s Kospi fell 6% to 5,251.87. Chinese markets experienced lighter losses, with the Hang Seng decreasing by 1.6% and the Shanghai Composite down by 0.7%.
As of early Monday, Brent crude prices were at $103.54 per barrel, while U.S. crude reached $107.35—both reflecting a 15% increase since Friday.
These prices are the highest seen in 14 years. They rose sharply following the escalation of conflict in the Middle East, reminiscent of the spike when Russia invaded Ukraine in 2022. Expert Stephen Innes from SPI Asset Management remarked that the market reacted sharply to this “oil alarm bell,” signaling serious concerns.
Persistently high oil prices could have global repercussions, particularly for countries grappling with inflation and rising export tariffs imposed during Donald Trump’s presidency. In light of these challenges, Southeast Asian leaders are gathering in Manila to discuss strategies to deal with soaring energy costs.
Analyst Ipek Ozkardeskaya from Swissquote noted that while oil prices might peak soon, they are expected to fluctuating in higher ranges for weeks or even months, creating added pressure on global inflation and economic growth.
In the U.S., a Friday report revealed that employers cut more jobs than they added last month, exacerbating concerns about economic stability. Following this news, the S&P 500 dropped 1.3%, and the Dow suffered a loss of 453 points, or 0.9%.
The U.S. dollar remains a strong currency, gaining against others like the Japanese yen and the euro. With these economic challenges, investors are keeping a close watch on developments in oil prices and their broader implications.
For more detailed insights, you can review reports from reliable sources like the International Energy Agency.
Source link
Financial markets, Energy industry, General news, Middle East, Iran war, Persian Gulf, Stephen Innes, Economic indicators, Business, Donald Trump, International trade, Iran, South Korea, Japan, Energy markets, World news, Federal Reserve System, Lee Jae Myung, World News
