First Published: 2018-04-12

Syria fears hit Asia markets
Fears about high-stakes US-Russia stand-off over Syria arrest rally fuelled by Xi Jinping's conciliatory trade message earlier in the week.
Middle East Online

HONG KONG - Asia markets fell on Thursday as fears about a high-stakes US-Russia stand-off over Syria arrested a rally fuelled by Xi Jinping's conciliatory trade message earlier in the week.

Having enjoyed a semblance of stability this week after the Chinese president's comments soothed trade war talk, traders are now turning their attention to the Middle East.

With Western leaders trying to decide how to respond to an alleged chemical attack on a Damascus district, Donald Trump on Wednesday tweeted that "missiles will be coming", defying Russian warnings against a military strike.

Trump blames Syrian leader Bashar al-Assad and Moscow for the deadly assault that killed dozens in Douma, while his press secretary added that with regards to military action "all options are on the table".

Russia's ambassador to Beirut warned any US missiles would be shot down "as well as the sources they were fired from".

Adding to the geopolitical crisis was news that Saudi Arabia had shot down ballistic missiles fired from rebel-held Yemen at Riyadh.

The latest developments hit US markets, with all three main indexes ending sharply down, while oil prices shot up on fears about supplies in the crude-rich region, hitting levels not seen since late 2014 and boosting energy firms.

"The oil markets are very much linked to geopolitical tensions, especially if they're in the Middle East, the heart of global oil exports," Fatih Birol, executive director of the International Energy Agency, told Bloomberg Television.

"If tensions continue, they will continue to have an impact on the oil market and prices. Definitely, this will be a reason to push the prices up."

- 'Limited' impact -

Nervousness mixed with profit-taking in Asia as traders cashed in recent gains.

Tokyo lost 0.1 percent, Hong Kong eased 0.8 percent and Shanghai slipped 0.9 percent. Sydney fell 0.2 percent and Singapore shed 0.3 percent, while Seoul, Wellington, Taipei and Jakarta were also lower.

However, while investors are anxiously watching events in Syria, Kengo Suzuki and other strategists at Mizuho Securities were less concerned.

"Stock markets are unlikely to react massively because its negative impact on corporate earnings would be limited -- it would rather be positive for the military industry," they said in a joint commentary.

"Chances are that this problem could move markets only temporarily, considering it is unlikely to develop into a major 'war'."

Hong Kong's dollar fell to 7.85 per US dollar, its lowest level in 13 years, breaking the lowest point of its trading band as it is pressured by rising US interest rates.

While it is required to step in to support the local unit, the Hong Kong Monetary Authority -- the city's de facto central bank -- said buying would not automatically be triggered if other banks were buying it.

Expectations the Federal Reserve will continue to lift rates this year were fanned by data showing US inflation picking up, while minutes from its March meeting indicated a more hawkish outlook for the world's top economy.

In early European trade London fell 0.1 percent, while Paris and Frankfurt each rose 0.1 percent.

 

Russia mulls supplying S-300 missile systems to Syria

Morocco, EU start talks on new fisheries deal

Bashir fires Sudan foreign minister

US has 'concerns' about Turkey holding fair vote under state of emergency

Saudi women embrace sports headscarves

Rouhani slams officials' 'vow of silence' in face of protests

Natalie Portman says backed out of Israel prize over Netanyahu

Rebels set to leave new area outside Damascus

FIFA to return to Morocco to check hotels, stadiums

Turkey in shock after violent Istanbul derby

Iraq pays first war reparations to Kuwait since 2014

Fiery kites adopted as new tactic by Gaza protesters

Romanian president slams plan to move Israel embassy

Western strikes on Syria bring no change whatsoever

Trump criticises OPEC for high oil prices

Syria says rebels south of capital surrender

Market has capacity to absorb higher oil prices: Saudi minister

Putin 'ready' for Trump summit

Saudi Arabia to host first public film screening

HRW criticises Lebanon for evicting Syria refugees

Saudi says intercepted ballistic missile from Yemen

Washington: Assad still has 'limited' chemical capability

European MPs urge US not to scrap Iran deal

Oil price soars to highest level in years

Two more pro-Kurdish MPs stripped of Turkey seats

Oil theft 'costing Libya over $750 million annually'

Turkey's snap polls: bold gambit or checkmate for Erdogan?

Iran arrests senior official over public concert

Bahrain sentences 24 to jail, strips citizenship

UN experts urge Iran to cancel Kurd's death sentence

Moderate quake strikes near Iran nuclear power plant

Syria regime forces caught in surprise IS attack

Turkey sentences 18 to life for killing ‘hero’ coup soldier

Exxon faces setback in Iraq as oil and water mix

Libya to clamp down on fuel smuggling

Yemen to arrest colonel for overlooking African migrant rape

Erdogan sends Turkey to snap polls on June 24

Qatar joins Gulf military exercise in apparent compromise

Saudi-Russia oil alliance likely to undercut OPEC

UN in security talks with Syria on chemical probe

Riyadh says two al Qaeda militants killed in Yemen

Record of women candidates in Lebanon, but you can't tell from TV

Sudan protests to UN over Egypt voting in disputed area

Erdogan calls Turkey snap polls for June 24

Rights watchdog say African migrants face rape, torture in Yemen