Asian Markets Today | July 9: Asia-Pacific markets traded mixed early Thursday, July 9 after renewed US-Iran military conflict. South Korea's Kospi rose 3% on Thursday after falling into a bear market the day before. It advanced 2.92% at open, while the small-cap Kosdaq gained 1.28%. Japan's Nikkei 225 added over 1.17% and the Topix was 0.20% higher.
Australia's benchmark S&P/ASX 200 was 0.83% lower. The rise in the regional indices comes after US launched fresh strikes on Iran in response to Tehran's attacks on commercial shipping in and around the Strait of Hormuz, US Central Command said Wednesday afternoon. West Texas Intermediate crude futures were last up nearly 1%. Crude oil prices extended their rally on Thursday after the US struck targets in Iran for a second straight day, reviving fears of disruption to energy supplies from the Middle East.
Brent crude rose 1.4% to trade above $79 per barrel after rising over 5% in the previous session. US West Texas Intermediate traded near $74, taking crude oil's gains over the past two sessions to 7%. The US Central Command had said on Wednesday that fresh strikes on Iran were launched in response to Tehran's attacks on commercial shipping in and around Hormuz. Iran authorities had said earlier that it attacked US military sites in Bahrain and Kuwait in response to earlier US strikes on infrastructure.
US President Donald Trump signaled yesterday that he was no longer interested in negotiating a deal with Iran. Prior to that, he also said that the ceasefire between Iran and the US was “over,” following another wave of attacks in the Middle East. Trump also warned that oil prices could climb further and suggested future action could include a “take over” of Iran's Kharg Island export hub.The escalation has once again put the Strait of Hormuz — the key waterway connecting Persian Gulf oil producers with global markets — at the centre of the crude market. The waterway handles one-fifth of the world's crude supply.
In US markets, the Dow Jones index dropped 576.76 points, or 1.1%, while the S&P 500 fell 0.28% on Wednesday. Both indexes were weighed down by a spike in oil prices. The Nasdaq Composite, however, rose 0.2%, aided by an advance in Nvidia and other chip stocks. Investors feared that rising energy costs could reignite inflation, forcing the US Federal Reserve to keep interest rates elevated for longer than previously expected. The central bank is divided as policymakers are reluctant to cut rates until there is a clearer evidence that US inflation is moving sustainably toward the Fed's 2% target.
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