Asian stocks retreated on Monday due to concerns about escalating tensions in the Middle East, leading investors to seek safer assets. Despite an attack by Iran on Israel over the weekend, U.S. futures rose and oil prices fell, with benchmark U.S. oil declining to $85.25 a barrel. The impact of the drone attack on global markets, particularly oil prices, may be limited, according to experts. Japan’s Nikkei 225 slipped 1% and the U.S. dollar rose against the Japanese yen to a 34-year high.
In currency trading, the U.S. dollar also rose against the euro, while Australia’s S&P/ASX 200 and South Korea’s Kospi both experienced declines. Hong Kong’s Hang Seng dropped 0.5%, while the Shanghai Composite gained 1.4%. Other Asian markets, including Taiwan’s Taiex and India’s Sensex, also saw declines as they prepared for national elections. The retreat in Asian markets followed a decline on Wall Street on Friday, with the S&P 500 and Dow Jones Industrial Average both dropping.
JPMorgan Chase weighed heavily on the market with a 6.5% decline despite reporting stronger profits for the first quarter. The pressure for companies to produce higher profits is particularly intense now, given concerns about interest rates and inflation. Traders are betting on fewer rate cuts by the Federal Reserve, which could impact stock prices. Treasury yields fell, and the price of gold rose as investors sought safer investments. U.S. consumer sentiment also dipped, with concerns about inflation rising.
Overall, the uncertainty in global markets due to geopolitical tensions and economic factors is leading to cautious trading. Investors are closely monitoring developments in the Middle East and the impact on oil prices, as well as economic indicators such as interest rates and inflation. The outcome of national elections in various Asian countries is also a factor affecting market sentiment. Despite these challenges, experts remain cautiously optimistic about the resilience of the global economy and the ability of markets to navigate through periods of volatility.
