Asia stocks fall on US-Iran flare-up.
Asian stocks fell on Wednesday, pressured by heightened risk aversion after a renewed military flare-up between the U.S. and Iran, while a recovery in technology stocks also fizzled out.
South Korea’s KOSPI was the worst performer in the region, pressured renewed losses in heavyweight chipmaking stocks after a major wipeout on Monday. Chinese and Japanese stocks slid after local inflation data raised heightened concerns over the inflationary impact of the Iran war.
Asian markets took a middling lead-in from Wall Street, as a flare-up in U.S.-Iran tensions and renewed losses in chipmakers spurred overnight losses. S&P 500 Futures fell 0.2%, with focus turning to key U.S. consumer price index inflation data due later in the day.
Regional markets were spooked by a spike in oil prices, after the U.S. and Iran exchanged a fresh round of strikes on Tuesday evening. The renewed hostilities stemmed from Iran’s shooting down of a U.S. helicopter in the Strait of Hormuz earlier this week.
Gold drops below $4,200/oz.
Gold prices fell for a fourth consecutive session on Wednesday, pressured by a stronger U.S. dollar and rising expectations of a Federal Reserve rate hike, as fresh U.S. strikes on Iran kept energy-driven inflation concerns in focus.
Spot gold slipped 1.9% to $4,180.85 per ounce by 22:06 ET (02:06 GMT), reaching its lowest level since March 23.
U.S. Gold Futures also dropped 1.9% to $4,204.75, as investors reduced exposure ahead of key U.S. consumer price index (CPI) data due later on Wednesday.
Washington launched new strikes on Iranian targets on Tuesday following the downing of a U.S. military helicopter near the Strait of Hormuz, reigniting fears of broader disruptions to global energy supplies.
Oil prices rose around 1% on Wednesday, adding to concerns that higher fuel costs could feed into inflation and complicate the Federal Reserve’s policy outlook.
The prospect of persistent inflation has prompted investors to scale back expectations for U.S. rate cuts.
More than 70% of market participants are pricing in a Fed rate hike by December.
Bitcoin falls to $61k on US-Iran escalation.
Bitcoin fell on Wednesday, tracking a broader decline in risk-driven markets as fresh military action between the U.S. and Iran dampened hopes for a peace deal in the Middle East.
Losses came even as institutional selling showed some signs of cooling after three straight weeks of heavy outflows from spot exchange-traded funds.
Bitcoin fell 3% to $61,375.5 by 02:12 ET (06:12 GMT). The world’s largest crypto wiped out most of a brief rebound seen earlier this week after top corporate holder Strategy Inc (NASDAQ:MSTR) bought more of the coin.
Bitcoin spooked by US-Iran escalation
Losses in Bitcoin came amid a broader rout in risk-driven assets, especially equities, as investors pivoted into the dollar and other safe havens.
Iran launched missile and drone attacks as U.S. military bases and several other targets in the Middle East, retaliating for earlier American attacks near the Strait of Hormuz.
The renewed hostilities stemmed from the downing of a U.S. helicopter in Hormuz earlier this week.
Wednesday’s attacks further undermined hopes for a U.S.-Iran peace deal, despite repeated claims from U.S. officials that a deal was close.
Oil prices surged after the latest hostilities, keeping markets on edge over the inflationary impact of the war and its effect on interest rates.
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