Asian shares displayed a mixed performance on Friday, following losses on Wall Street, as oil prices pared earlier gains linked to the intensifying Iran war. The price of Brent crude, the international benchmark, retreated to approximately $107 per barrel after a dramatic surge the previous day.
Volatile Oil Market Amid Escalating Conflict
Oil prices experienced a roller-coaster session on Thursday, with Brent crude briefly skyrocketing to around $119 per barrel. This spike was driven by escalating attacks by Iran on oil and gas facilities across the Gulf region, which came in response to Israel's assault on a key Iranian natural gas field.
In early Friday trading, however, Brent crude fell by 1.6% to $106.90 per barrel. This decline followed remarks from Israeli Prime Minister Benjamin Netanyahu, who indicated he would hold off on further attacks on Iran's gas field at the request of U.S. President Donald Trump. Benchmark U.S. crude also dropped by 2% to $93.63 per barrel.
Global Inflation and Supply Chain Concerns
The Iran war, now in its third week, has sent energy prices soaring, exacerbating global inflation worries. There are growing concerns over the supply of oil and gas, particularly with the Strait of Hormuz—a crucial waterway for energy supply located between Iran and Oman—largely closed.
In a potential move to ease oil prices, U.S. Treasury Secretary Scott Bessent floated the possibility on Thursday of lifting sanctions on Iranian oil at sea. This proposal aims to mitigate the supply disruptions caused by the conflict.
Mixed Reactions in Asian Financial Markets
The retreat in oil prices helped stabilise markets to some extent. In Asia, South Korea's Kospi gained 0.6% to reach 5,798.23, while Japan's Nikkei 225 was closed for a holiday. Hong Kong's Hang Seng lost 0.6% to 25,340.43, and the Shanghai Composite index edged up 0.2% to 4,013.16.
Australia's S&P/ASX 200 fell by 0.5%, and Taiwan's Taiex traded 0.2% lower. These mixed results reflect the ongoing uncertainty in the region as investors grapple with the geopolitical tensions.
Wall Street Losses and Corporate Performance
On Thursday, Wall Street reported modest losses, with the S&P 500 down 0.3% to 6,606.49. The Dow Jones Industrial Average lost 0.4% to 46,021.43, and the Nasdaq composite was 0.3% lower at 22,090.69.
Shares of U.S. memory chip maker Micron Technology fell by 3.8%, despite the company reporting better-than-expected quarterly results. This decline occurred even as its shares have surged roughly 330% over the past year due to a worldwide memory shortage.
Precious Metals and Currency Movements
In other early Friday dealings, gold and silver prices showed gains. Gold, which had fallen below $4,700 earlier partly due to inflation worries, rose by 2.6% to $4,727.20 per ounce. Silver prices increased by 4.2% to $74.22 an ounce, recovering from an earlier dip.
The U.S. dollar strengthened to 158.38 Japanese yen from 157.76 yen, while the euro traded at $1.1558, down from $1.1589. These currency movements highlight the broader financial market adjustments in response to the ongoing conflict and its economic implications.
