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France's CAC 40 lost 1.5% in early trading to 7,548.83, while
Germany's DAX dove 2.0% to 21,944.26. Britain's FTSE 100 fell
1.7% to 9,754.80. U.S. shares were set to drift lower with Dow
futures down 0.5% at 45,659.00. S&P 500 futures fell 0.7% to
6,515.25.
In Asia, Japan’s benchmark Nikkei 225 dropped 3.5% to finish at
51,515.49. In Taiwan, the Taiex shed 2.5% to 32,722.50.
Australia’s S&P/ASX 200 fell 0.7% to 8,365.90. South Korea’s
Kospi dove 6.5% to 5,405.75. Hong Kong’s Hang Seng slipped 3.5%
to 24,382.47, while the Shanghai Composite declined 3.6% to
3,813.28.
Trump over the weekend warned the U.S. will “obliterate” Iran’s
power plants if it doesn’t fully open the Strait of Hormuz
within 48 hours, prompting Tehran to say it would respond to any
such strike with attacks on U.S. and Israeli energy and
infrastructure assets in the region.
“Trump’s ultimatum and Iran’s retaliatory warnings point to a
widening conflict that keeps energy disruption and market
volatility elevated with no clear off-ramp in sight,” said Ng
Jing Wen, analyst at Mizuho Bank in Singapore.
Higher oil prices, which also shook stock markets on Friday,
dashed hopes for a possible upcoming cut to interest rates by
the Federal Reserve, analysts said. Before the war, traders were
betting that the Fed would cut rates at least twice this year.
Central banks in Europe, Japan and the United Kingdom also
recently held their interest rates steady.
But analysts observed that the markets were starting to react
less to each of Trump's remarks, perhaps deciding the narrative
for markets was being set elsewhere, not Washington, such as
what Iran might do but how global economic growth could be
affected by soaring energy prices. Some Asian nations, like
Japan, are vulnerable to higher energy prices.
In energy trading, benchmark U.S. crude added $1.62 to $99.85 a
barrel. Brent crude, the international standard, gained $1.42 to
$113.61 a barrel. The price of Brent crude has zigzagged lately
from about $70 per barrel before the war began to as high as
$119.50.
In currency trading, the U.S. dollar rose to 159.53 Japanese yen
from 159.22 yen. The euro cost $1.1526, down from $1.1571.
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AP Business Writers Chan Ho-him in Hong Kong, and Stan Choe in
New York contributed to this report.
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