Asian Equities Slide as US-Iran Clashes Boost Oil Prices
Asian equities fell across the board on Monday as renewed clashes between the US and Iran pushed crude prices sharply higher, while traders recalibrated expectations for US monetary policy after Federal Reserve Chair Kevin Warsh signaled a willingness to raise interest rates again.
The MSCI Asia Pacific Index dropped as much as 0.8%, with technology shares leading the decline, and emerging-market equities fared worse, sliding as much as 1.4% in the steepest intraday drop since August 24.
Brent futures climbed as much as 2.7% to $90.51 a barrel after US forces struck two Iranian rocket launchers on Larak Island in the Strait of Hormuz on Sunday, and Tehran retaliated by targeting American military positions in Jordan and claimed to have hit a tanker moving through the strategic waterway.
US crude rose 2.6% to $85.57 a barrel, with Stephen Innes of Quintex Intel commenting that 'Hormuz is once again threatening to put a floor under oil just as Warsh is putting a ceiling on how much inflation patience markets should assume from the Fed.'