Middle East Tensions Send World Shares Lower Amid Rising Oil Prices
World shares and US futures declined on Tuesday as tensions in the Middle East pushed oil prices higher. The Houthi attacks on oil facilities and utilities in Saudi Arabia's southern region escalated renewed fighting between a key US ally and Iranian-backed rebels in Yemen.
The Germany DAX fell 0.3% to 25,922.44, while France's CAC 40 dropped 0.2% to 8,291.43. The UK's FTSE 100 remained nearly unchanged at 10,824.32. US futures also declined, with the S&P 500 down 0.2% and the Dow Jones Industrial Average falling 0.7%. Tokyo's Nikkei 225 gave up early gains, sinking 1.7% to 65,269.33.
Brent crude, the international standard, added 1.5% to $98.48 a barrel as tensions simmered in the six-month US war with Iran. Benchmark US crude surged 2.5% to $93.79 a barrel. The yen gained value against the dollar, slipping to 153.86 from 154.34 yen.
Norihiro Yamaguchi of Oxford Economics said stronger business investment boosted consumption, but overall investment still contracted at minus 0.9%. He also warned that supply-side-driven inflation would accelerate ahead as firms pass on increased costs, deteriorating consumers' purchasing power.