South Korea’s Kospi leads losses in Asia as Iran war worries keep investors on edge – CNBC
Asia-Pacific markets mostly fell on Tuesday as oil prices saw choppy trading after a report said that U.S. President Donald Trump was looking to avoid a prolonged conflict in the Middle East.
The Wall Street Journal reported on Monday evening stateside that Trump told aides he was willing to end the U.S. military hostilities against Iran even if the Strait of Hormuz remained largely closed.
The West Texas Intermediate futures for May delivery were 0.1% lower at $102.78 a barrel as of 3:42 a.m. ET. May futures for Brent crude rose 0.24% to $113.05 per barrel, after erasing declines.
Trump and his aides assessed that an operation aimed at reopening the critical chokepoint could prolong the conflict beyond the initial timeline for the war, which was up to six weeks, the WSJ said.
“Trump could be forced to wave the white flag to control gas prices and thereby inflation before midterms,” said Ben Emons, CIO at Fed Watch Advisors, highlighting that Trump’s “verbal signals” for ending the Iran war gained currency after Brent neared the $120 per barrel level.
The war has increasingly become an “asymmetric” game, Emons said, as the U.S. leans toward ending the war while Iran continues to impose costs. “This is a moment to consider rotating out of the war portfolio and into a rebound portfolio,” he said.
Trump had earlier threatened to expand attacks to Iran’s civilian energy infrastructure, including water desalination plants, if Tehran failed to reopen the Strait of Hormuz.
Shipping traffic through the Hormuz waterway, through which a fifth of the global seaborne oil used to transit before the conflict, has virtually ground to a halt since the U.S. and Israel launched strikes on Iran on Feb. 28.
South Korea’s blue-chip Kospi dropped nearly 4.26% to end at 5,052.46 while the small-cap Kosdaq lost nearly 5% to 1,052.39. The Korean won depreciated 0.84% to 1,529.9 against the U.S. dollar, hovering near its weakest level since 2009.
Japan’s Nikkei 225 dropped 1.58% to 51,063.72, while the broad-based Topix reversed earlier losses to end 1.26% higher at 2,497.86.
Australia’s S&P/ASX 200 added 0.25% to close the session at 8,481.8.
Hong Kong Hang Seng index was marginally lower as of its last hour of trade, while mainland China’s CSI 300 fell 0.93% to finish at 4,450.05.
India markets were closed for a holiday.
Overnight in the U.S., the S&P 500 fell 0.39% to finish at 6,343.72, marking its third losing session in a row while the Nasdaq Composite fell 0.73% to end at 20,794.64. The Dow Jones Industrial Average bucked the trend to rise 0.11% to 45,216.
The stocks pulled back even as Federal Reserve Chair Jerome Powell said that inflation outlook remains in check despite rising energy prices and the central bank does not need to respond with higher interest rates.
U.S. stock futures also edged higher, with futures tied to the S&P 500 rising 0.3%, while Nasdaq 100 futures adding 0.2%. Dow Jones Industrial Average futures advanced 177, or 0.4%.
Correction: This copy was updated to reflect that India markets are closed for a holiday.
