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Stocks Fall After Trump Iran Warning 05/18 04:50
World shares mostly retreated and oil prices jumped on Monday after U.S.
President Donald Trump warned Tehran that the "clock is ticking" as U.S.-Iran
negotiations over a permanent end to the war stall.
HONG KONG (AP) -- World shares mostly retreated and oil prices jumped on
Monday after U.S. President Donald Trump warned Tehran that the "clock is
ticking" as U.S.-Iran negotiations over a permanent end to the war stall.
U.S. futures fell and markets in Japan and South Korea pulled back from
their records. In early European trading, Britain's FTSE 100 edged up 0.1% to
10,205.31. France's CAC 40 lost 0.9% to 7,883.42, and Germany's DAX dropped
0.1% to 23,925.82.
During Asian trading, Tokyo's Nikkei 225 fell 1% to 60,815.95, a decline led
by technology-related stocks. It reached all-time intraday high levels last
week above 63,000.
The yield on the 10-year Japanese government bond surged to as high as 2.8%,
its highest level since the late 1990s. That's part of a broader shift toward
higher yields as the Bank of Japan gradually raises interest rates and higher
energy costs raise expectations of rising inflation. The yield was around 2.55%
just one week ago.
Seoul's Kospi climbed 0.3% to 7,516.04 after trading lower earlier in the
day. It crossed the 8,000 mark for the first time on Friday, supported by
buying of technology shares driven by the boom in artificial intelligence, but
later declined partly on profit-taking by investors.
Hong Kong's Hang Seng lost 1.1% to 25,675.18. The Shanghai Composite index
edged 0.1% lower to 4,131.53, after China reported weaker-than-expected
economic data for April.
Australia's S&P/ASX 200 declined 1.5% to 8,505.30.
Taiwan's Taiex dropped 0.7%, while India's Sensex fell less than 0.1%.
Oil prices rose after Trump warned Iran in a social media post that "the
Clock is Ticking, and they better get moving, FAST, or there won't be anything
left of them" following a call with Israeli Prime Minister Benjamin Netanyahu.
Trump has set deadlines for Iran and then backed off, so investors have
remained cautious about the situation in the Strait of Hormuz and how it is
impacting global energy flows, including oil and gas. The strait is still
mostly closed, and the U.S. has also imposed its own sea blockade on Iranian
ports since last month.
A drone strike over the weekend on a United Arab Emirates' nuclear power
plant added to worries over a potential escalation in the conflict.
Brent crude, the international standard, gained 0.7% to $110.05 per barrel.
It was trading at roughly $70 a barrel in late February before the start of the
Iran war. Benchmark U.S. crude was trading 1% higher to $106.49 per barrel.
"Re-escalation risks are increasing," ING commodities strategists Warren
Patterson and Ewa Manthey wrote in a research note. While there has also been a
pick up on shipping activities over the past week around the strait, they said,
"this can change quickly."
The pair also noted that the oil market was reacting to the lack of tangible
results on the Iran war after last week's widely-watched summit between Trump
and Chinese President Xi Jinping in Beijing, even as the White House said both
the U.S. and China had agreed that the Strait of Hormuz must remain open.
U.S. officials had hoped that Beijing could use its influence, given its
economic ties with Iran, to help broker a peace agreement and reopen the
strait. Trump said last week in an interview that Xi told him China "would like
to be of help" in negotiating an end to the war. So far it's been unclear how
Beijing might do that.
The yield on the U.S. 10-year Treasury was at around 4.60%, up from 4.47%
last Thursday and sharply higher than the nearly 4% level it was holding at
before the Iran war.
On Friday, the benchmark S&P 500 dropped 1.2% from the record it set the day
before. The Dow Jones Industrial Average fell 1.1% and the technology-heavy
Nasdaq composite lost 1.5%.
In other dealings early Monday, the U.S. dollar rose to 158.82 Japanese yen
from 158.62 yen. The euro was trading at $1.1645, up from $1.1622.
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