The Asia-Pacific markets experienced a decline on Monday following Iran’s massive drone and missile attacks on Israel. The attack, which involved more than 300 drones and missiles, was described by President Joe Biden as “unprecedented.” The U.S. intervened to assist Israel in intercepting most of the incoming munitions. In light of these events, traders are carefully considering the implications on the global economy and financial markets.
Despite the escalating tensions in the Middle East, oil prices remained relatively stable on Monday morning. Brent crude futures were down 0.14% at $90.32 per barrel, while U.S. West Texas Intermediate futures were 0.32% lower at $85.39. Investors are also awaiting key economic data releases from China and Japan later in the week. China is set to announce its first quarter GDP numbers, while Japan will release trade data and inflation numbers for March.
Asian markets responded differently to the geopolitical uncertainty caused by Iran’s attacks. Japan’s Nikkei 225 fell by 1.278%, with the Topix index down by 0.76%. South Korea’s Kospi slid by 1.19%, while the Kosdaq dropped by 1.55%. Australia’s S&P/ASX 200 saw a smaller decline compared to other markets, falling by 0.67%. Hong Kong’s Hang Seng index was 1.5% lower, but mainland China’s CSI300 index bucked the trend and gained nearly 1%.
In the U.S., stock futures showed a slight increase on Sunday as investors digested the news of Iran’s attacks and the recent market volatility. Futures tied to the Dow Jones Industrial Average rose by 90 points, or 0.2%, while S&P 500 futures added 0.2% and Nasdaq-100 futures advanced 0.3%. Gold futures, which had reached record levels the previous week, pulled back slightly to $2,373 an ounce. The precious metal has seen a 15% increase this year as investors seek safe-haven assets amidst inflation concerns and geopolitical tensions.
The Asia-Pacific markets are navigating through uncertain times as geopolitical events unfold. Traders will continue to monitor the situation closely and adjust their strategies accordingly. As economic data releases and market trends provide more clarity, market participants will be able to make informed decisions in the days ahead.
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