Risk aversion grips Asian stocks, currencies; Philippines cuts rates as expected
SINGAPORE/HONG KONG: Asian stock markets and currencies fell on Thursday on broader risk-off sentiment as cautious investors weighed the possibility of US involvement in the Israel-Iran conflict.
Meanwhile, the Philippine central bank cut its policy rate by 25 basis points as expected. Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona stated that while an accommodative policy was needed, there were risks associated with geopolitical tensions and external policy uncertainty that had to be monitored.
The peso was largely unchanged after the decision, still trading down 0.6 per cent near a two-month low. Iran and Israel traded further air attacks as US President Donald Trump kept markets guessing on whether Washington would join Israel's strikes on Iranian nuclear facilities.
The Israeli shekel weakened 0.3 per cent. The Indonesian rupiah fell 0.6 per cent to a near three-month low and the Indian rupee dipped 0.3 per cent. The South Korean won fell as much as 1 per cent and the Vietnamese dong touched a record low.
"Geopolitical developments remain fluid, and caution is warranted as we head into the weekend," said Christopher Wong, currency strategist at OCBC.
With oil prices at risk of going higher as a result, net-oil importing currencies such as the peso, the rupee, the won and the Thai baht may be affected more than other peers, he added.
The Taiwan dollar weakened 0.3 per cent ahead of its central bank's rate decision, in which it is likely to maintain its policy rate. The Thai baht fell as much as 0.9 per cent to a one-month low as political uncertainty weighed on already fragile sentiment.
Thai Prime Minister Paetongtarn Shinawatra's government hangs by a thread, with coalition partners reconsidering their support after a major player's exit threatened to bring down the administration.
In the near term, political uncertainty may weaken the baht further, as foreign investors lose confidence and sell Thai assets especially if the US dollar strengthens and gold prices continue to fall, said Poon Panichpibool, markets strategist at Krung Thai Bank.
Bangkok equities dropped as much as 2.4 per cent to their lowest since April 9. Other stock markets also tumbled, with equities in Taiwan slipping 1.6 per cent and those in Singapore down 0.6 per cent.
Indonesia stocks dropped 2.4 per cent to their lowest since May 14, a day after the country's central bank paused its easing cycle just hours before the US Federal Reserve held rates steady as expected.
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New Straits Times
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- New Straits Times
Oil tanker market signals more energy disruption ahead
While global energy markets are not yet pricing in worst-case scenarios for the Israel-Iran war, oil tanker rates are providing a good real-time gauge of the escalating risks. Geopolitical risk has spiked following Israel's surprise bombardment of the Islamic republic last Friday and Iran's retaliatory ballistic missile strikes, leading to a rally in global energy prices, with Brent crude rising eight per cent to roughly US$75 a barrel. But markets and investors now appear to be in a holding pattern as the conflict unfolds, with possible scenarios spanning everything from an imminent ceasefire and strengthened nuclear deal to a joint United States-Israel effort to destroy Iran's nuclear programme and potentially bring about regime change. For oil markets, the central risk remains the blocking or disruption of maritime traffic through the Strait of Hormuz, a narrow waterway between Iran and Oman through which one-fifth of the world's oil and gas consumption flows. Iranian strikes on energy infrastructure in Saudi Arabia or the United Arab Emirates — both US allies — would represent another major escalation. Current oil prices suggest the market is still largely discounting such extreme scenarios, but trends in the oil tanker market show that oil shipping activity is being impacted even without direct action by Teheran. The benchmark daily rate for a "very large crude carrier" (VLCC) moving oil from the Middle East to China has risen by 40 per cent since June 13, reflecting the higher risk premium tanker owners are now charging to move through the strait. LSEG shipping market analysts anticipate further rate increases in the coming days. Tanker rates in other regions have also risen. For example, VLCC rates between West Africa and China have also jumped by over 40 per cent since Friday. This is partly due to an expectation that crude buyers will seek to secure supplies from regions outside the Middle East in order to reduce the risk of disruption to their refining or trading operations. In another sign of the conflict's indirect impact on shipping, Qatar's national energy company instructed liquefied natural gas and oil tankers to stay outside Hormuz and to enter the Gulf only the day before loading, Reuters reported. While no physical attacks have occurred in Hormuz, tensions in the Gulf were heightened on Tuesday after two oil tankers collided and caught fire near the Strait of Hormuz. One of the tankers, the Front Eagle, which was destined for China, was loaded with two million barrels of Iraqi crude oil, according to monitoring service The exact cause of the collision, which resulted in no injuries or spills, is still unclear. But it coincided with a surge in electronic interference among commercial ship navigation systems in recent days around Hormuz and the wider Gulf. This electronic disruption was affecting vessels' ability to accurately transmit positional data via automated identification systems (AIS), which posed operational and navigational challenges for maritime traffic, said the US-led Joint Maritime Information Centre in an advisory. The source of the interference, known as jamming, was unclear. LSEG analysts said more than 260 vessels in the Gulf had their AIS positions corrupted at one point in recent days, as they appeared to be "sailing" on the land around the South Pars Central Power Plant in southern Iran. Similar incidents have been recorded in other parts of the world in the past. For example, signal disruptions affecting AIS and GPS signals rose sharply in the Baltic Sea following Moscow's invasion of Ukraine in 2022. The physical oil market, where real-world trade activity overlaps with political and military activity, can often help investors assess risk levels at moments of heightened geopolitical tension. Amid the current fog of war, the tanker market in the Middle East is flashing warning lights.
New Straits Times
an hour ago
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Iran leader 'can no longer exist' after hospital hit
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"He considers the destruction of the state of Israel to be a goal. Such a man can no longer be allowed to exist." Hospital director Shlomi Codish said 40 people were injured at the Soroka, where an evacuated surgical building was hit leaving smoke billowing. "Several wards were completely demolished and there is extensive damage across the entire hospital with damage to buildings, structures, windows, ceilings across the medical centre," he told journalists at the site. The latest escalation came on the seventh day of deadly exchanges between the two countries that have plunged the region into a new crisis, 19 months into the Gaza war. Mohammad Hassan, a Pakistani student at the University of Tehran, described frightening scenes in Iran's capital during the Israeli strikes. "Those days and nights were very horrifying... hearing sirens, the wailing, the danger of being hit by missiles," he told AFP after returning to Pakistan. "As one peeped out the window in the night, you could see drones, missiles with fire tails." Khamenei has rejected Trump's demand for an "unconditional surrender", despite the president's claims that "Iran's got a lot of trouble and they want to negotiate". Trump has left his intentions on joining the conflict deliberately ambiguous, saying Wednesday: "I may do it, I may not do it. I mean, nobody knows what I'm going to do. "The next week is going to be very big," he added, without further details. Any US involvement would be expected to involve the bombing of a crucial underground Iranian nuclear facility in Fordo, using specially developed bunker-busting bombs. The White House said Trump would receive an intelligence briefing on Thursday, a US holiday. Top US diplomat Marco Rubio is set meet his British counterpart for talks expected to focus on the conflict. "I have ideas as to what to do, but I haven't made a final (decision)," Trump said. "I like to make the final decision one second before it's due, because things change. Especially with war." The Wall Street Journal reported that Trump had told aides on Tuesday he had approved attack plans but was holding off to see if Iran would give up its nuclear programme. The US president had favoured a diplomatic route to end Iran's nuclear programme, seeking a deal to replace the 2015 agreement he tore up in his first term. But since Israel unleashed the campaign against Iran last week, Trump has stood behind the key US ally. On Thursday morning, Israel said it had carried out dozens of fresh raids on Iranian targets overnight, including the partially built Arak nuclear reactor and a uranium enrichment facility in Natanz. The Israeli military said the Arak site in central Iran had been hit "to prevent the reactor from being restored and used for nuclear weapons development". There was a "near-total national internet blackout" in Iran on Wednesday, a London-based watchdog said, with Iran's Fars news agency confirming tighter internet restrictions after initial curbs imposed last week. The military campaign has sparked calls for a return to diplomacy. Russian President Vladimir Putin said Thursday that a deal to guarantee both Israel's security and Iran's desire for a civilian nuclear programme was possible. "I believe it would be good for all of us together to look for ways to stop the fighting and seek ways for the participants in the conflict to find an agreement," he told foreign journalists at a televised event. He said Iran had not asked Russia for military help. An Israeli military official, who asked not to be named, said Wednesday that Iran had fired around 400 ballistic missiles and 1,000 drones since the conflict began on Friday. Iranian strikes have killed at least 24 people and injured hundreds since they began, Netanyahu's office said on Monday. Iran said Sunday that Israeli strikes had killed at least 224 people, including military commanders, nuclear scientists and civilians. Iran had been enriching uranium to 60 per cent -- far above the 3.67-per cent limit set by the 2015 deal, but still short of the 90 per cent needed for a nuclear warhead. Israel has maintained ambiguity on its own arsenal, but the Stockholm International Peace Research Institute says it has 90 nuclear warheads.
The Star
an hour ago
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Iran denies targeting hospital in southern Israel
Smokes raises from a building of the Soroka hospital complexin Beersheba, Israel, Thursday, June 19, 2025. (AP Photo/Leo Correa) ISTANBUL (BERNAMA-ANADOLU): Iran denied on Thursday (June 19) Israeli accusations of intentionally striking Soroka Hospital in southern Israel, Anadolu Ajansi (AA) reported. "Our powerful Armed Forces accurately eliminated an Israeli Military Command, Control and Intelligence headquarters and another vital target," Iranian Foreign Minister Abbas Araghchi said in a statement on his X account. He said the blast wave caused superficial damage to a small section of the nearby, and largely evacuated Soroka Military Hospital. "The facility is mainly used to treat Israeli soldiers engaged in the genocide in Gaza 25 miles away, where Israel has destroyed or damaged 94% of Palestinian hospitals," he added. Iran's state news agency IRNA claimed the missiles targeted the headquarters of the Israeli army and intelligence service near Soroka Hospital. Hostilities began on June 13 when Israel launched airstrikes on several sites across Iran, including military and nuclear facilities, prompting Tehran to launch retaliatory strikes. In Iran, 585 people have been killed and more than 1,300 wounded in the Israeli assault, according to Iranian media reports. - Bernama-Anadolu
