Precise Investors Editorial Team
MSCI’s broadest index of Asia-Pacific shares was down 0.3%
Asian stocks wobbled on Monday even after Iran and the United States agreed to halt renewed hostilities that had cast a shadow over an interim peace deal and supported oil prices.
A return to diplomacy in the Middle East would follow several days of tit-for-tat strikes since a cargo vessel was hit in the Strait of Hormuz last week, with both sides accusing each other of breaking an interim ceasefire.
Markets though were under pressure, with KOSPI down almost 2% and Nikkei sliding 1%, leaving MSCI’s broadest index of Asia-Pacific shares down 0.3%.
It feels like we are lacking a bit of direction, said Nick Twidale, chief market strategist at ATFX Global in Sydney.
We may get a shot in the arm later today from more positive news out of the Middle East but at the moment I think it’s going to be a bit of a flow-driven day without major moves to either side, Twidale said.
Worries over the future of the peace deal lifted oil prices, which have given up almost all of their war-driven gains as markets quickly reprice the prospect of easing supply.
On Monday, Brent crude futures pared early gains to trade 0.5% higher at $72.37 a barrel.
The 14-point interim peace accord agreed on June 17 was meant to halt the fighting, which the U.S. started on February 28, and reopen the critical strait while talks proceeded on other issues.
Markets have grown accustomed to the oscillations in U.S.-Iran talks, said Vasu Menon, managing director of investment strategy for OCBC.
We are moderately constructive on the investment outlook for the second half of the year given the abundance of liquidity on the sidelines and the decent news flow on the economic and earnings fronts, he said.
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