Asia stocks fall as US-Iran tensions lift oil.
Asian stock markets fell on Monday with South Korean shares tumbling more than 5%, as renewed tensions in the Middle East drove oil prices sharply higher, dampening investor appetite for risk and dragging technology stocks lower.
Futures tracking U.S. equities also pointed lower, with tech-heavy Nasdaq futures leading losses.
South Korea’s benchmark KOSPI dropped more than 5%, extending its recent selloff as heavyweight chipmakers came under renewed pressure.
Samsung Electronics (KS:005930) shares slid nearly 7%, while SK Hynix (KS:000660) slumped 11%.
Japan’s Nikkei 225 fell 1.3%, while the broader TOPIX index dipped 0.8%.
Investor sentiment deteriorated after geopolitical tensions flared again over the weekend.
Iran on Sunday expanded missile and drone attacks to Gulf states in retaliation for U.S. military strikes. It also declared the Strait of Hormuz closed.
Gold slips as oil rally.
Gold prices extended losses on Monday after renewed U.S. and Iranian strikes over the weekend lifted oil prices and reinforced concerns that a fresh inflation shock could keep the Federal Reserve on a hawkish path, weighing on the appeal of non-yielding bullion.
At 01:05 ET (05:05 GMT), XAU/USD fell 1.54% to $4,057.76 an ounce, while Gold Futures slipped 1.17% to $4,065.45 an ounce. XAG/USD fell 2.80% to $58.19 an ounce, while XPT/USD declined 1.61% to $1,604.60.The ETF inflows have helped reverse a recent streak of withdrawals and supported Bitcoin’s recovery from late-June lows, although weekly flows remained negative overall after heavy outflows in previous sessions.
he conflict in the Middle East intensified over the weekend after the U.S. carried out another round of strikes on Iranian targets following an attack on a Cyprus-flagged cargo vessel in the Strait of Hormuz. Although Tehran said the key shipping route would remain closed until further notice, U.S. officials disputed the claim, highlighting the fragile state of ceasefire negotiations.
Asia FX weakens as dollar firms.
The U.S. dollar firmed against most Asian currencies on Monday as rising Treasury yields and renewed Middle East tensions boosted demand for the greenback, while investors pared expectations for near-term Federal Reserve easing ahead of this week’s U.S. inflation data.
Renewed U.S.-Iranian missile and drone exchanges over the weekend kept concerns over the Strait of Hormuz and global energy supplies in focus, adding to inflation worries and underpinning the dollar despite lingering uncertainty over the broader geopolitical outlook.
The U.S. Dollar Index rose about 0.2% to 101.16, while benchmark Treasury yields pushed higher as traders positioned for Fed Chair Kevin Warsh’s congressional testimony and Tuesday’s June CPI report, which could provide fresh clues on the policy outlook.
Yen outlook brightens despite broader dollar strength
The Japanese yen remained under close watch after Friday’s sharp rebound followed comments from Japanese Finance Minister Satsuki Katayama that she wanted to encourage public pension funds, including the Government Pension Investment Fund (GPIF), to invest more in Japanese financial assets.
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