Asian markets fell on Monday amid worries that Iran could become involved in a regional war if Israel launches its anticipated ground offensive against Hamas in Gaza. There were also warnings that oil prices could rise, making it more difficult for central banks to control inflation.
Asian markets drop as Middle East conflict: More than a million Palestinians have been forced to leave the territory’s north by Tel Aviv, raising concerns about a humanitarian crisis.
Even though President Joe Biden stated that Israel had the right to defend itself, he indicated that any attempt to retake the Gaza Strip would be a “big mistake” on CBS’s 60 Minutes.
However, according to sources, he was thinking of visiting Israel after Israeli Prime Minister Netanyahu invited him over the phone. Meanwhile, Secretary of State Antony Blinken is scheduled to make his second trip to Israel since the Hamas strikes on Monday.
“Concerns about Iran’s potential involvement, given its suspected role in planning this month’s attack, have led to worries that the local strife may spread to other regions, prompting the potential meeting.”
“The key uncertainty is whether a ground operation risks widening the conflict, with markets focused on whether Iran and its allies are drawn into the conflict,” said Tapas Strickland of National Australia Bank.
Jamie Dimon, CEO of JPMorgan Chase & Co., issued a global crisis warning on Friday if the conflict continued to escalate.
In the bank’s third-quarter earnings release, he stated that “this may be the most dangerous time world has seen in decades.”
The conflict in Ukraine, exacerbated by Israel’s attacks last week, “may have profound effects on the world’s energy and food markets, trade, and geopolitical relations.”
The Nasdaq and S&P 500 both fell as a result of the unpredictability, while oil prices increased by almost 6%.
However, excellent results from JPMorgan, Citi, and Wells Fargo that came as a result of rising interest rates helped the Dow close marginally higher. Tokyo, Hong Kong, Shanghai, Singapore, Seoul, Taipei, Wellington, and Manila were all in red for Asia.
However, profit-taking caused oil prices to decline.
“White House Tightens Restrictions on Chinese Access to Chips and Equipment, Federal Reserve Decisions in Focus”
News that the White House would tighten restrictions on Chinese access to chips and equipment for creating them added to the depressing atmosphere. Despite efforts to defuse tensions, this step would perpetuate a long-running security standoff between the superpowers.
Traders will closely watch the lectures this week by a number of Federal Reserve decision-makers, including Chairman Jerome Powell, in the hopes of learning more about their plans for interest rates.
The discussions follow recent comments from a number of officials that they were content to keep borrowing costs steady, allaying worries that further tightening could push the US economy into a recession.
Key figures around 0230 GMT
Tokyo – Nikkei 225: DOWN 1.6 percent at 31,786.78 (break)
Hong Kong – Hang Seng Index: DOWN 0.2 percent at 17,777.03
Shanghai – Composite: DOWN 0.4 percent at 3,075.99
Dollar/yen: DOWN at 149.46 yen from 149.53 yen on Friday
Pound/dollar: UP at $1.2159 from $1.2138
Euro/pound: DOWN at 86.56 pence from 86.58 pence
West Texas Intermediate: DOWN 0.2 percent at $87.56 per barrel
Brent North Sea crude: DOWN 0.1 percent at $90.84 per barrel
New York – Dow: UP 0.1 percent at 33,670.29 (close)
London – FTSE 100: DOWN 0.6 at 7,599.60 (close)