Global stock markets lost billions of dollars on Monday while oil prices continued to rise as US President Donald Trump warned Iran that “the clock is ticking” as talks over the Iran conflict bogged down.
Investors were edgy after Trump’s caution following talks with Israeli Prime Minister Benjamin Netanyahu. The comment fueled fears that tensions in the Middle East could escalate and further disrupt world oil supplies.
Traders were worried about the Strait of Hormuz, a critical shipping route for nearly 20 percent of the world’s oil supply, pushing oil prices higher.
Brent crude was up 77 cents at $110.05 a barrel, and US West Texas Intermediate (WTI) crude was up $1.05 at $106.49 a barrel. Both oil benchmarks traded near $70 a barrel earlier this year before the Iran conflict heated up.
The steep increase in energy prices caused sharp losses on stock markets in Asia, Europe, and the United States.
The Nikkei 225 index in Japan lost 614 points to 60,815.95. Hong Kong’s Hang Seng Index fell 286 points to end at 25,675.18, and Australia’s S&P/ASX 200 lost 129 points to 8,505.30.
The weaker data comes after China reported slower consumer spending and factory activity in April.
The data comes after China reported slower consumer spending and factory activity in April.
South Korea’s Kospi index rose 22 points to close at 7,516.04, with technology companies linked to artificial intelligence remaining in favour with investors.
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European markets weren’t much better. The CAC 40 in France was down 71 points at 7,883.42, and Germany’s DAX was down 24 points at 23,925.82. Britain’s FTSE 100 was up 11 points at 10,205.31.
Wall Street investors continued to sell shares after last week’s losses. Investors worried about inflation and rising fuel costs pushed the S&P 500 down 72 points, the Dow Jones Industrial Average down more than 430 points, and the Nasdaq Composite down nearly 280 points.
Analysts say the conflict involving Iran continues to roil global markets, with higher oil prices driving up costs of transport, manufacturing, and food around the world.
The conflict has also disrupted shipping routes in the Gulf region. Some companies are diverting cargo vessels around Africa to avoid the peril near the Strait of Hormuz, increasing fuel and shipping costs for businesses worldwide.
If tensions escalate further, oil prices could increase even more, adding to the burden on economies already grappling with inflation and sluggish growth, financial experts warn.
