Oil futures jumped back above $100 a barrel (€85.57) at the open in Asia on Monday, the dollar fell, and stocks were down as US-Iran talks collapsed without making progress toward any durable peace.
China and Hong Kong stocks weakened, joining a broader equity sell-off in Asia.
The Shanghai Composite Index lost 0.2 per cent to 3,979.26 by the lunch break, and the blue-chip CSI300 Index weakened 0.1 per cent, both clawing back from the steep losses at the opening hour.
Hong Kong benchmark Hang Seng lost 1.2 per cent to 25,587.26. The Hang Seng Tech Index was down 1 per cent
The US also announced a blockade of Iranian ports, a measure aimed at ratcheting up pressure on Tehran, as well as on the recipients – mainly China – of Iranian crude.
The blockade, experts say, is an act of war that requires an open-ended commitment of a significant number of warships. The cut to global supply, if Iranian exports are removed, would be up to 2 million barrels per day.
Soft commodities also rose sharply on heightened concern about disruption to fuel and fertiliser supplies, and bonds were sold on worries about the risks to inflation.
Other reactions in the Asia session to the breakdown of US-Iran talks, however, were not extreme and sent most asset prices back to where they sat around the middle of last week, before the US, Israel and Iran agreed a ceasefire.
That will leave markets trading the headlines while US earnings season begins in earnest with Goldman Sachs reporting before the market opens. – Reuters
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