World shares slide as US-Iran war strains global fuel supply

Hong Kong: World shares retreated while oil prices again popped above $100 per barrel as anxiety remained over the Iran war and its impact on supplies of crude oil and gas. US futures slipped, with the futures for the S&P 500 and Dow Jones Industrial Average down 0.3 per cent.

In early European trading, Britain’s FTSE 100 fell 0.7 per cent to 10,235.29. Germany’s DAX lost 1 per cent to 23,345.90, while France’s CAC 40 dropped 1.2 per cent to 7,887.18. In Asian trading, Tokyo’s Nikkei 225 index slipped 1.2 per cent to 53,819.61. Technology-related stocks saw some of the bigger losses, with SoftBank Group falling 4.5 per cent.

South Korea’s Kospi fell 1.7 per cent to 5,487.24. Hong Kong’s Hang Seng lost 1 per cent to 25,465.60, while the Shanghai Composite index was down 0.8 per cent at 4,095.45. Australia’s S&P/ASX 200 edged 0.1 per cent lower to 8,617.10. Taiwan’s Taiex was trading 0.5 per cent lower, and India’s Sensex dropped 1.8 per cent.

Oil prices held steady as Brent crude, the international standard, traded at $101 per barrel. Benchmark US crude was up 0.5 per cent at $96.23 per barrel.

On Thursday, Iran’s new Supreme Leader Ayatollah Mojtaba Khamenei, in his first public statements, vowed Iran would keep fighting and continue to use the Strait of Hormuz — a crucial waterway for oil and gas transport which has been effectively closed with significant marine traffic disruptions — as leverage against the US and Israel.

Roughly 20 per cent of the world’s oil is estimated to flow through the strait, and attacks on ships in or around the strait have already heightened concerns “over the scale of supply disruption and persistent shipping bottlenecks,” wrote analysts at Mizuho Bank in a commentary.

The remarks from Iran’s new leader came after U.S. President Donald Trump said the war was “very complete,” which have raised worries over how much longer the tensions could last. Intense strikes hit Iran’s capital Tehran Friday morning.

Oil prices have been volatile since the Iran war began. While the International Energy Agency said Wednesday its members would make a record 400 million barrels of oil available from their emergency reserves, some economists believe that would do little to reassure markets.

Global inflation will likely worsen as oil prices jump, and rising fuel costs are already starting to hurt consumers globally. Rising energy prices could also, for example, push up AI and chip development and production costs, some analysts say.

Wall Street recorded losses Thursday following volatile swings this month. The S&P 500 dropped 1.5 per cent and the Dow Jones Industrial Average fell 1.6 per cent. The Nasdaq composite shed 1.8 per cent. Shares at some of the companies heavily reliant on fuel costs saw bigger drops. Cruise-ship operator Carnival fell 7.9 per cent, and United Airlines sank 4.6 per cent.

In other dealings early Friday, gold and silver prices fell. The price of gold fell 0.8 per cent to $5,082.70 an ounce, and the price of silver dropped 3.2 per cent to $82.38 per ounce. The US dollar rose to 159.43 Japanese yen from 159.34 yen. The euro was trading at $1.1449, down from $1.1512.