MSCI’s broadest index of Asia-Pacific shares declined 2%, after earlier sliding 2.6%, and U.S. stock futures pointed 1% lower, retracing part of an initial 1.7% decline
Asian shares and bond yields dipped on Friday while safe-haven currencies, gold and crude oil climbed after reports Israel attacked Iran in a continuing series of assaults that have increased concerns of a wider conflict in the Middle East.
However, the scope of the market moves were mitigated somewhat as details emerged the Israeli attack was limited and Iranian officials denied any attacks were launched against it.
MSCI’s broadest index of Asia-Pacific shares declined 2%, after earlier sliding 2.6%, and U.S. stock futures pointed 1% lower, retracing part of an initial 1.7% decline.
U.S. long-term Treasury yields were last down 9 basis points (bps) at 4.5567%, after earlier declining 15 basis points. The safe-haven yen had rallied 0.7% against the dollar, but was last up around 0.3%. The Swiss franc was nearly 0.6% higher versus the dollar, paring earlier gains of 1.2%.
Gold gained 0.6%, but was earlier up 1.7% at $2,417.59, taking it just short of last week’s all-time high at $2,431.29.
The lack of clarity on what Iran might do next will keep investors nervous and market volatile for now, at a time when investors are faced with significant inflation and interest rate uncertainties as well, according to Vasu Menon, MD of investment strategy at OCBC.
Brent futures soared 4.2%% on concerns Middle East supply could be disrupted, but were last up 2.4% at $89.22. Iran is the third-biggest oil producer of the Organization of the Petroleum Exporting Countries (OPEC), as per Reuters’ data.
Japan’s Nikkei was last down 2.4%, while Taiwan’s stock benchmark dropped 3.5%. Hong Kong’s Hang Seng shed 1.2%.
Equity markets were already heading lower before the Middle East headlines, as more robust U.S. economic data spurred more Fed officials to signal no rush to reduce interest rates.
