Asian markets mostly fell Friday, following another Wall Street sell-off as oil prices shot up to a nine-month high on concerns about the growing crisis in Iraq. Assets considered safe options in times of uncertainty also benefited, with gold up and the yen holding on to healthy gains seen in US trade. Investors are also awaiting the release of Chinese indicators and the end of a Bank of Japan policy meeting later in the day.
Tokyo fell 0.78 percent, Sydney tumbled 0.94 percent and Seoul sank 1.00 percent but Hong Kong added 0.14 percent and Shanghai was flat. New York´s three main indexes took a hit Thursday on news that Iraqi militants were pushing towards Baghdad after capturing a town to the north. The Dow fell 0.65 percent and the S&P 500 lost 0.71 percent — both having hit record highs earlier in the week — and the Nasdaq sank 0.79 percent. US President Barack Obama raised the prospect of possible air strikes when he said his national security team “is looking at all the options”. Forces from the autonomous Kurdish region took control of disputed northern oil hub of Kirkuk to protect it from attack, officials said.
Adding to the fears over more geopolitical instability is the prospect that supplies from a major oil producer could be cut off. And those worries filtered through to crude markets. The US benchmark, West Texas Intermediate for delivery in July, jumped 81 cents to $107.34, having surged $2.13 in US trade. Brent crude, the European benchmark, was up 54 cents at $113.56 after rallying $3.07 on London´s Intercontinental Exchange. On foreign exchange markets the dollar was at 101.78 yen in early trade, compared with 101.68 yen in New York trade and well off the 102.08 yen in Tokyo earlier Thursday.
The euro was at 137.95 yen from 137.80 yen in New York but also well off the 138.10 yen in Asia Thursday. The single currency also bought $1.3554 compared with $1.3553.”Risk-off sentiment and the threat of renewed US military involvement in Iraq… will keep investors in sell mode — or sidelined,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. With high oil prices raising the chances of a jump in inflation traders moved into gold, which is a hedge against rising prices. The precious metal was up at $1,273.95 an ounce at 0230 GMT compared with $1,264.20 late Thursday. -thenews