Hong Kong, Jun 16 (AP) Asian markets ended with a mixed performance on Monday as oil prices continued their upward trajectory, fueled by rising tensions between Iran and Israel that threaten to disrupt global crude supplies. US benchmark crude oil saw a modest increase, adding 20 cents to reach USD 73.18 per barrel. Meanwhile, Brent crude, the international benchmark, climbed 95 cents, priced at USD 75.18 per barrel.
In regional market updates, Tokyo's Nikkei 225 index rose by 1.3%, closing at 38,307.74, while Seoul's Kospi index increased 0.9% to 2,920.57. Chinese equities showed little movement despite May data indicating robust consumer spending but lackluster performance in factory activities and investments. Retail sales jumped by 6.1% year-on-year, yet industrial output only grew by 5.8%, falling short of expectations.
Hong Kong's Hang Seng index slightly declined by 0.1%, settling at 23,864.20. Conversely, the Shanghai Composite Index edged up less than 0.1%, ending at 3,378.78. Australia’s market reflected a downturn as the S&P/ASX 200 slipped 0.2% to 8,547.40.
Last Friday, equity markets took a hit, and oil prices surged following Israel’s assault on Iranian nuclear and military infrastructures. The S&P 500 index plunged 1.1% to 5,976.97, the Dow Jones Industrial Average dropped 1.8% to 42,197.79, and the Nasdaq composite lost 1.3% to 19,406.83. This was amidst a dramatic spike in oil prices with both US crude and Brent crude escalating by more than 7%.
As one of the leading oil producers, Iran's capability to distribute oil has already been hampered due to Western sanctions. The possibility of a broader conflict could further restrict Iran's oil supply, leading to sustained high crude and gasoline prices worldwide. Additionally, analysts highlight the strategic importance of the Strait of Hormuz, a crucial channel through which a significant portion of the globe's oil is transported.
The escalation impacted companies reliant on fuel and discretionary consumer spending. Carnival, a cruise operator, plummeted 4.9%, while United Airlines and Norwegian Cruise Line Holdings fell by 4.4% and 5% respectively. These losses overshadowed the surge seen in US oil producers and firms poised to gain from the Israel-Iran conflict, such as Exxon Mobil, up by 2.2%, and ConocoPhillips, up 2.4%.
Defense contractors also benefited from the rising geopolitical tensions. Companies like Lockheed Martin, Northrop Grumman, and RTX all saw increases of over 3%. Gold prices appreciated as investors sought safe havens, with the value of an ounce of gold rising by 1.4% on Friday, maintaining its position early Monday.
Despite usual trends, Treasury bond prices decreased on the backdrop of heightened investor anxiety, pushing yields up. This was partly due to fears that the oil price spike might drive inflation upwards. Though inflation has been stable and within the Federal Reserve's 2% target, concerns linger that it could soon escalate, exacerbated by President Donald Trump’s imposition of tariffs.
Reports indicating improved US consumer sentiment on Friday also nudged yields higher. According to the University of Michigan, consumer confidence rose for the first time in six months as Trump's tariff measures were temporarily halted, while consumers’ inflation expectations relaxed.
Elsewhere on Wall Street, Adobe experienced a 5.3% drop despite exceeding Wall Street's profit forecasts for the most recent quarter. Although analysts lauded its performance, there were murmurs that investors were hoping for more robust revenue predictions in the year ahead.
In early Monday currency exchanges, the US dollar advanced to 144.37 Japanese yen from 144.03 yen, while the euro climbed to USD 1.1537 from USD 1.1533. (AP)
(Only the headline of this report may have been reworked by Editorji; the rest of the content is auto-generated from a syndicated feed.)
