Asian shares slump; gold, oil soar after Iran strike on U.S. forces

This post was originally published on this site

By Andrew Galbraith

SHANGHAI (Reuters) – Asian shares and U.S. treasury yields plunged on Wednesday, while gold and oil shot higher after Iran fired rockets at an Iraqi airbase that hosts U.S. military forces, stoking fears of further sharp escalations in a developing conflict.

Iran’s missile attacks on the Ain Al-Asad air base and another in Erbil, Iraq, early Wednesday came hours after the funeral of an Iranian commander whose killing in a U.S. drone strike has raised fears of a wider war in the Middle East.

In morning trade, MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.5%. Japan’s dropped 2.5% and Australian shares fell 1%.

soared 4.42% to $65.47 a barrel.

“We’ve moved on from how Iran will respond to now anticipating the U.S. 52-pronged response as the U.S. military forces in the region are in a heightened state of alert while likely preparing for war,” said Stephen Innes, strategist at AxiTrader. “It’s not going to be pretty today”

The sharp sell-off in risk assets was accompanied by steep drops in U.S. Treasury yields as investors flocked to safety. Benchmark yielded 1.7188%, down more than 10 basis points from a U.S. close of 1.825% on Tuesday.

The two-year yield dropped to 1.4581% compared with a U.S. close of 1.546%. The dollar also plunged against the yen, with the Japanese currency touching its strongest point against the greenback since October. The U.S. currency was last down 0.69% against the yen at 107.67.

The euro gained 0.1% on the day to $1.1161.

The flight to safety and a falling dollar supported gold, which rocked 1.91% higher on the spot market to $1,603.93 per ounce.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment