Stocks Avoid Losses on the Report on Oil Reserve Release – Asia Market Wrap
Equities recovered as the Financial Times reported that the Group of Seven countries will explore a possible combined release of petroleum reserves to help limit the rise in energy costs.
Asia’s benchmark share index fell by less than 4% after dropping as much as 5.6% earlier. Equity-index futures in the US and Europe also reduced losses.
Stocks remained substantially down on the day, with concerns that the recent spike in oil prices may accelerate inflation and drain global economy. Crude prices rose above $100 per barrel on Monday for the first time since 2022, as the US-Israeli war on Iran shows no signs of abating and both sides appear poised to prolong the fight. The Dollar strengthened, and government bonds fell.
Brent crude rose as much as 29% to $119.50 a barrel, adding to last week’s 28% increase, as the Iran crisis entered its second week. WTI increased by as much as 31%. The commodity also lost part of its gains following the FT story.
Other market movers included gold, which fell due to a stronger US currency and concerns about rising interest rates. Gold has been under pressure as rising petroleum prices increase inflation fears in the US, increasing the possibility that the Fed would keep interest rates stable for longer.
