Singapore, Asia-Pacific markets pare losses after US strikes on Iran; oil prices give back gains
[SINGAPORE] Asia-Pacific markets recovered some losses while oil prices gave back some gains by Monday (Jun 23) afternoon, following declines in the morning after the US launched strikes against three nuclear facilities in Iran over the weekend.
Singapore's Straits Times Index (STI) was down 0.4 per cent. DBS declined 0.3 per cent to S$43.19. OCBC slid 0.1 per cent or S$0.08 to S$15.82 and UOB fell 1 per cent or S$0.34 to S$34.55.
Greater China markets declined in early trade after the open. Hong Kong's Hang Seng Index was up 0.6 per cent after earlier losses, while in the mainland, the CSI 300 Index rose 0.5 per cent after marginal declines.
Japan's Nikkei 225 edged down 0.1 per cent, while South Korea's Kospi was down 0.2 per cent. Australia's ASX fell around 0.3 per cent.
Oil prices surged in early trade on Monday, with Brent and the main US crude contract WTI both climbing more than 4 per cent to hit their highest price since January before paring gains. Brent last jumped 2.7 per cent to US$79.06 per barrel after 9 am Singapore time and WTI was up 2.8 per cent at US$75.87.
By Monday afternoon, past 2 pm Singapore time, Brent walked back some gains to trade around US$78.23 per barrel, while WTI was at US$75.
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Crude prices already spiked last week after Israel attacked Iran. Brent had risen 13 per cent since the conflict began on Jun 3, while WTI had gained around 10 per cent, according to Reuters data on Monday morning.
The US dollar index rose around 0.3 per cent to 99. It last strengthened slightly around 0.2 per cent to the Singapore dollar at around S$1.2899, after 2.30 pm Singapore time.
On Saturday, US President Donald Trump announced strikes against three Iranian nuclear facilities, boosting Israel's efforts to destroy Iran's nuclear programme. This followed more than a week of Israeli air attacks on Iran's nuclear and military facilities and US attempts to persuade Iran to reach a deal to dismantle its nuclear programme.
In response, Iran on Sunday threatened US bases in the Middle East, intensifying concern of a deepening of conflict in the region.
An adviser to Iran's supreme leader Ayatollah Ali Khamenei Ali said bases used by US forces could be attacked in retaliation, given that the US 'has attacked the heart of the Islamic world and must await irreparable consequences'.
He warned that countries in the region or elsewhere from which the US launched its strikes would be considered legitimate targets by Iran's armed forces.
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CNA
21 minutes ago
- CNA
Oil prices stable as investors await Iranian response to US strikes
LONDON :Oil prices jumped on Monday to their highest since January as the United States' weekend move to join Israel in attacking Iran's nuclear facilities stoked supply concerns. Brent crude futures were up just 8 cents to $77.09 a barrel as of 0904 GMT. U.S. West Texas Intermediate crude rose by 3 cents to $73.87. Price volatility continued in Monday's session. Both contracts touched fresh five-month highs earlier in the session of $81.40 and $78.40 respectively, before giving up their gains and even turning negative during the European morning session. Brent has risen around 11 per cent since the conflict began on June 13, while WTI has gained approximately 9 per cent. Prices flattened out on Monday as investors weighed the geopolitical risk premium in oil markets without any impact on supply yet from the Middle Eastern crisis. "The geopolitical risk premium is fading, as so far there has been no supply disruptions. But as it's unclear how the conflict might evolve, market participants are likely to maintain a risk premium for now. So prices are set to stay volatile in the near term," UBS analyst Giovanni Staunovo said. Prices rose at the open after U.S. President Donald Trump said he had "obliterated" Iran's main nuclear sites in strikes over the weekend, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself. Iran is OPEC's third-largest crude producer. Iran said on Monday that the U.S. attack on its nuclear sites expanded the range of legitimate targets for its armed forces and called U.S. President Donald Trump a "gambler" for joining Israel's military campaign against the Islamic Republic. The geopolitical risk premium includes fears that an Iranian retaliation may include a closure of the Strait of Hormuz, through which roughly a fifth of global crude supply flows. "All eyes remain on the Strait of Hormuz ... and whether Iran will seek to disrupt tanker traffic," Saxo Bank analyst Ole Hansen said. Prices could spike in the short term even without full-scale disruption, if the threat of interference alone is enough to delay shipments through the Strait, Hansen added. Goldman Sachs said in a Sunday report that Brent could briefly peak at $110 per barrel if oil flows through the critical waterway were halved for a month, and remain down by 10 per cent for the following 11 months. The bank still assumed no significant disruption to oil and natural gas supply, citing global incentives to try to prevent a sustained and very large disruption. Given the Strait of Hormuz is indispensable for Iran's own oil exports, which are a vital source of its national revenues, a sustained closure would inflict severe economic damage on Iran itself, making it a double-edged sword, said Sugandha Sachdeva, from research firm SS WealthStreet.
CNA
21 minutes ago
- CNA
Iran issues stark warning to Trump 'the gambler' as Israel keeps up attacks
TEHRAN: Tehran threatened on Monday (Jun 23) to inflict "serious" damage in retaliation for US strikes on the Islamic republic's nuclear facilities, as the Iran-Israel war entered its 11th day despite calls for de-escalation. Aerial assaults meanwhile raged on, with air raid sirens sounding across Israel and AFP journalists reporting that several blasts were heard over Jerusalem. The Israeli military said it had struck missile sites in western Iran as well as "six Iranian regime airports" across the country, destroying fighter jets and helicopters. President Donald Trump said US warplanes used "bunker buster" bombs to target sites in Fordo, Isfahan and Natanz, boasting the strikes had "obliterated" Iran's nuclear capabilities. Other officials said it was too soon to assess the true impact on Iran's nuclear programme, which Israel and some Western states consider an existential threat. Iranian armed forces spokesman Ebrahim Zolfaghari said on state television that the US' "hostile act", following more than a week of Israeli bombardments, would "pave the way for the extension of war in the region". "The fighters of Islam will inflict serious, unpredictable consequences on you with powerful and targeted (military) operations," he warned. "Mr Trump, the gambler, you may start this war, but we will be the ones to end it." Global markets reacted nervously, with oil prices jumping more than 4 per cent early on Monday. China urged both Iran and Israel to prevent the conflict from spilling over, warning of potential economic fallout. Oman, a key mediator in the stalled Iran-US nuclear talks, condemned the US strikes and called for calm. Iran's foreign ministry accused Washington of betraying diplomacy. "Future generations will not forget that the Iranians were in the middle of a diplomatic process with a country that is now at war with us," said ministry spokesman Esmaeil Baqaei. Britain, France and Germany called on Iran "not to take any further action that could destabilise the region". As the world awaited Iran's response, supreme leader Ayatollah Ali Khamenei called the bombing campaign Israel launched on Jun 13 "a big mistake". "REGIME CHANGE" US Secretary of State Marco Rubio called on China to help deter Iran from closing the Strait of Hormuz, a chokepoint for one-fifth of the world's oil supply. With Iran threatening US bases in the region, the State Department issued a worldwide alert cautioning Americans abroad. In central Tehran on Sunday, protesters waved flags and chanted slogans against US and Israeli attacks. In the province of Semnan east of the capital, 46-year-old housewife Samireh said she was "truly shocked" by the strikes. "Semnan province is very far from the nuclear facilities targeted, but I'm very concerned for the people who live near," she told AFP. Iranian President Masoud Pezeshkian said the US strikes revealed Washington was "behind" Israel's campaign against the Islamic republic and vowed a response. After the Pentagon stressed the goal of American intervention was not to topple the Iranian government, Trump openly toyed with the idea. "It's not politically correct to use the term, 'Regime Change,' Trump posted on his Truth Social platform. "But if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn't there be a Regime change???" Hours later he doubled down on emphasising the success of his strikes. "Monumental Damage was done to all Nuclear sites in Iran, as shown by satellite images. Obliteration is an accurate term!" Trump wrote, without sharing the images he was referencing. At a Pentagon press briefing earlier in the day, top US general Dan Caine said "initial battle damage assessments indicate that all three sites sustained extremely severe damage". Israeli Prime Minister Benjamin Netanyahu, meanwhile, said his country's bombardments would "finish" once the stated objectives of destroying Iran's nuclear and missile capabilities have been achieved. "We are very, very close to completing them," he said. "BLOW UP" Israeli strikes on Iran have killed more than 400 people, Iran's health ministry said. Iran's attacks on Israel have killed 24 people, according to official figures. Rafael Grossi, director of the International Atomic Energy Agency (IAEA), told an emergency meeting of the UN Security Council that craters were visible at the Fordo facility, but it had not been possible to assess the underground damage. "Armed attacks on nuclear facilities should never take place," he added. Iranian Foreign Minister Abbas Araghchi, who was due to meet with Russian President Vladimir Putin on Monday, had accused the United States of deciding to "blow up" nuclear diplomacy with its intervention in the war. While Russia condemned the Israeli and US strikes, it has not offered military help and has downplayed its obligations under a sweeping strategic partnership agreement signed with Tehran just months ago.
Business Times
23 minutes ago
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US attack on Iran: Market reaction muted, but brace for more volatility ahead, say analysts
[SINGAPORE] Markets reacted in a more muted manner than expected on Monday (Jun 23) after the US launched strikes against three nuclear facilities in Iran over the weekend. But analysts warned that there could be more volatility ahead as the world awaits Iran's reaction. US President Donald Trump announced strikes against three Iranian nuclear facilities on Sunday (Jun 22), boosting Israel's efforts to destroy Iran's nuclear programme. This followed more than a week of Israeli air attacks on Iran's nuclear and military facilities and the US' attempts to persuade Iran to reach a deal to dismantle its nuclear programme. In response, Iran threatened US bases in the Middle East, intensifying concerns over a deepening of conflict in the region. Markets in the Asia-Pacific tumbled slightly initially, but by Monday's close, had recovered most of their losses – a reaction that was not as severe as when Israel first launched attacks. US futures rose marginally ahead of Monday's trading session. Hong Kong's Hang Seng Index closed up 0.6 per cent after earlier losses; on the mainland, the CSI 300 Index ended 0.3 per cent higher. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Japan's Nikkei 225 ended Monday's session around 0.1 per cent lower, and South Korea's Kospi closed 0.2 per cent down. Australia's ASX closed nearly 0.4 per cent lower. Oil prices gained initially, but were soon pared back. On Monday afternoon, they were still at levels higher than before the Jun 13 Israel attacks, with West Texas Intermediate (WTI) at a gain of around 8 per cent, and Brent at 10 per cent higher. Oil markets The spike in oil prices may have faded slightly somewhat intraday on Monday, but the broader trend reflects building pressure on global energy supply chains, said Charu Chanana, chief investment strategist at Saxo. 'Even without a direct shutdown of the Strait of Hormuz, higher shipping costs and insurance premiums could lift energy prices in a more sustained way,' she said. The Strait of Hormuz is a major trading route through which around a fifth of global oil and gas flows. Ipek Ozkardeskaya, senior analyst at Swissquote Bank, also noted that it takes a number of days to a few weeks to meaningfully disrupt global oil flows. 'A weakened Iran, if left with no other options, could still go down that road,' she cautioned. A sustainable jump in oil prices – to around US$100 a barrel for a few months – could have wider implications for the global economy by boosting inflation and preventing central banks from further easing; this would, in turn, weigh on production, business activity and growth, Ozkardeskaya said. OCBC's Vasu Menon said that, historically, past Middle East flashpoints may have caused oil prices to spike initially, but eventually failed to produce a lasting market reaction, partly because the feared impact and disruption to oil supply did not materialise. Equity and overall markets Menon, the bank's managing director of investment strategy and wealth management in Singapore, noted that Middle East markets ended mostly higher on Sunday, despite the US attack on Iran. 'The unfazed response from Middle East markets offers hope that the fallout for other global markets may not be dramatic ... they may not be down and out, and the response may be temporary, and a rebound could materialise eventually,' he said of global markets. Swissquote Bank's Ozkardeskaya noted it was 'extremely interesting' to note that S&P 500 futures were 'behaving like a normal Monday'. 'It really feels like markets have become increasingly unreactive to the news.' Menon added: 'A lot hinges on what Iran will do next, and whether it would sabotage oil supply in the Middle East in retaliation for the US attack. We will have to wait and watch over the next few days, or even a few weeks, to see how Iran responds. 'This may keep investors nervous and markets volatile in the short term, but may not be a game changer for markets. Of greater consequence to the markets may be the reciprocal tariffs that Trump will decide on by Jul 9,' he said. However, Menon urged investors to prepare for more volatility in the coming days and weeks. Saxo's Chanana said that markets now face 'overlapping risks': energy disruption, inflation shock, delayed rate cuts and rising global macro uncertainty. Rising inflation caused by energy disruptions could delay rate cuts by the inflation-sensitive US Fed. 'Trump's abrupt pivot from 'wait and see' to launching strikes reinforces a sense of strategic instability. For businesses and investors, it raises the bar for deploying long-term capital with confidence,' she said. 'While the market's initial reaction appears contained, investors should be cautious about becoming complacent.' But Menon said that these developments 'may not end the global equity bull market' if they don't result in sharply higher inflation. Markets have been very resilient this year, he pointed out, despite tariff shocks and geopolitical risks. 'What's going for markets is a lot of idle liquidity on the sidelines that could provide market support, should there be sharp pullbacks.' Gold One bright spot: Gold. Menon said that the scope for safe havens like gold to continue rising is likely to stay. This comes as global uncertainties continue, while global central banks proceed with diversifying away from their US dollar holdings towards gold. 'We see gold rising to US$3,900 per ounce over a 12-month horizon,' he said. Gold's classic hedge qualities may, however, come under the scanner if yields rise or the dollar strengthens significantly, cautioned Chanana. To her, gold miners and defence contractors stand to gain more attention if tensions from the conflict escalate further. 'These sectors have historically been sought out during geopolitical flare-ups and rising inflation concerns, and offer resilience in the face of volatility, especially if portfolios have more relative cyclical exposure to, say, tech or consumer discretionary,' said the Saxo analyst.
