Middle East Tensions Fuel Oil Price Rally, Southeast Asian Stocks Decline

Southeast Asian stocks retreated on Tuesday as renewed tensions in the Middle East fueled an oil price rally and drove a global bond selloff.

The MSCI gauge of Asean stocks dipped 0.5% to a two-week low, led by Singapore's FTSE Straits Times index which dropped 0.8%, and Malaysia's benchmark index which slipped more than 1%.

Taiwan's stocks bucked the trend, jumping 1.7% to a near two-month high, but this was not enough to offset the losses in other markets.

Renewed fighting in the Middle East triggered a selloff in global bonds, with the 10-year US Treasury yield rising to a near 20-month peak and Japan's 10-year benchmark yield touching 3% for the first time in three decades.