Middle East tensions hit Asian and Asean markets; oil and gold prices spike
[SINGAPORE] A wave of geopolitical panic swept across Asian markets on Friday (Jun 13), after Israel launched strikes on Iran's nuclear and military infrastructure, stoking fears of a wider regional conflict.
Singapore's Straits Times Index (STI) fell about 0.5 per cent or 19.1 points by 1 pm, trading at 3,903.8. Hong Kong's Hang Seng index slid 1.1 per cent or 255.7 points to 23,779.6.
Asean markets took hits as investor confidence waned. Malaysia's Kuala Lumpur Composite Index (KLCI) fell about 0.6 per cent, as Vietnam and Indonesia's main stock indices slid 0.8 per cent and 0.6 per cent, respectively. The Stock Exchange of Thailand's index was down about 0.3 per cent.
In Japan, the Nikkei 225 index declined 1.1 per cent, while the Kospi in South Korea dropped about 1.2 per cent.
Israel said it struck targets 'at the heart of Iran's nuclear enrichment programme' in nuclear facilities, ballistic missile factories and Iranian military commanders on Friday. The country said the attacks would begin a prolonged operation to prevent Tehran from building an atomic weapon.
Oil prices spiked amid fears of escalation, with Brent crude futures climbing about 8 per cent to US$74.80 a barrel after hitting intraday highs of US$78.50. Friday's gains were the largest intraday moves for both contracts since 2022 after Russia invaded Ukraine, causing energy prices to spike.
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Iran's Supreme Leader Ayatollah Ali Khamenei said Israel will receive 'harsh punishment' following Friday's attack that he said killed several military commanders.
As fear of further conflict escalated, investors rushed to safer assets as gold jumped 1.3 per cent, reaching US$3,422 per ounce.
The US dollar index witnessed a brief rebound of 0.5 per cent to above 98, appearing to regain its safe-haven appeal 'given the development is not a self-inflicted US wound', Maybank analysts wrote in a note following the news.
The greenback jumped against Asean pairs following months of weakness, rising 0.4 per cent against the Singapore dollar, 0.9 per cent against the peso and 0.7 per cent against the ringgit.
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