Record Stock Rally Falls Due to Oil Gains & Iran Conflict – Asia Market Wrap
Stocks fell on the week’s final trading day, but crude oil gained as rising Middle Eastern tensions rekindled fears about energy supply, putting a surge that had taken markets to new highs to the test.
The MSCI All Country World Index, the largest measure of global equities, fell 0.3% as confrontations between the US and Iran heightened Middle Eastern tensions, fuelling fears that rising energy costs will stifle economic growth. Asian stocks slumped 1.1%, reversing a record finish after Wall Street benchmarks slid from their highs.
Nonetheless, Asian equities were poised for their fifth week of gains, the longest winning streak since January. Futures indicated that casualties may spread to Europe after American forces retaliated to Iranian attacks on naval warships as they sailed in the Strait of Hormuz on Thursday. S&P 500 Index futures increased by 0.2%, indicating some resilience.
In other news, the Dollar remained close to pre-war levels amid hopes that the US-Israeli conflict with Iran would be resolved soon. The 10-year Treasury yield remained at 4.39%, having climbed 2 bps this week as high oil prices fuelled inflation concerns. Gold edged higher to around $4,710 per ounce.
In Europe, attention will shift to the Pound and gilts as Keir Starmer awaits the results of one of the most important municipal elections in modern British history.
