By MarketWatch and Associated Press
Asian markets fell in early trading Wednesday as Middle East tensions flared again after Iran fired more than a dozen missiles at two bases in Iraq that house U.S. troops.
U.S. officials said there were no immediate reports of casualties, and Iran’s foreign minister tweeted “We do not seek escalation or war,” leading some experts to speculate that the attack was a measured response to last week’s killing of a top Iranian general by a U.S. airstrike.
President Donald Trump issued a measured response, tweeting “All is well” and promising a statement Wednesday morning.
The attack sent crude oil futures and gold futures briefly soaring, though those gains were pared as overnight electronic trading continued. U.S. stock futures /zigman2/quotes/210407078/delayed YM00 +0.87% similarly plunged immediately after the attack, but largely recovered.
Stephen Innes, chief Asia market strategist for AxiTrader, said Trump’s response was, for now at least, “calming nerves, and risk assets are making a comeback as the market is taking some comfort in the lack of immediate U.S. military follow-through.”
Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK +2.96% fell 2% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.83% slipped 0.8%. The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -0.55% declined 0.6% while the smaller-cap Shenzhen Composite /zigman2/quotes/210598015/delayed CN:399106 -1.30% inched down 0.1%. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +2.58% dropped 0.8%, and benchmark indexes in Taiwan /zigman2/quotes/210597977/delayed TW:Y9999 +2.08% , Singapore /zigman2/quotes/210597985/delayed SG:STI +0.75% , Malaysia /zigman2/quotes/210598052/delayed MY:FBMKLCI +0.69% and Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX +0.90% were mixed. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +3.75% declined 0.3%.
Among individual stocks, oil producer Inpex /zigman2/quotes/206689846/delayed JP:1605 +5.36% rose in Tokyo trading, while SoftBank /zigman2/quotes/207303954/delayed JP:9984 +5.10% , Honda /zigman2/quotes/200490352/delayed JP:7267 +2.15% and Fast Retailing /zigman2/quotes/200663563/delayed JP:9983 +2.02% fell. In Hong Kong, oil company CNOOC /zigman2/quotes/203421416/delayed HK:883 +0.74% slipped, as did Bank of China /zigman2/quotes/204682472/delayed HK:3988 -0.78% and Alibaba /zigman2/quotes/215112034/delayed HK:9988 -0.38% . Samsung /zigman2/quotes/209800866/delayed KR:005930 +4.14% rallied in South Korea despite a warning that fourth-quarter operating profit will likely take a big hit. Beach Energy /zigman2/quotes/200513631/delayed AU:BPT +4.01% and Oil Search gained in Australia.
Financial markets have been on edge about the possibility of U.S.-Iranian conflict and disruption of oil supplies since last week’s killing of Gen. Qassem Soleimani by a U.S. drone in Baghdad.
Brent crude was up $1.02 at $69.29. At the start of Wednesday’s trading, it spiked $3.48 to $71.75 before retreating. Benchmark U.S. crude was up 82 cents to $63.51 per barrel in electronic trading on the New York Mercantile Exchange. It earlier jumped $2.95 to $65.65 before settling back.
Before the latest attack, the rush by investors into safe assets had been abating.
Gold’s momentum eased Tuesday after touching its highest price in nearly seven years.
On Wall Street, the benchmark S&P 500 index /zigman2/quotes/210599714/realtime SPX +2.59% lost 0.3% to 3,237.18 in trading that closed before the Iranian attack. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +2.66% lost 0.4% to 28,583.68. The Nasdaq composite /zigman2/quotes/210598365/realtime COMP +2.27% slipped less than 0.1% to 9,068.58.