London: Global markets exhibited a mixed response on Monday as oil prices saw a significant surge following a United States military strike on Iranian rocket launchers near the Strait of Hormuz. The incident has rekindled concerns about potential renewed conflicts in the Middle East, affecting investor sentiment worldwide.
According to United News of Bangladesh, European markets reflected this unease in their early trading sessions. Germany's DAX index experienced a decline of 0.9%, settling at 26,339.04, while France's CAC 40 saw a marginal drop of 0.1% to 8,390.43. Meanwhile, British markets remained closed due to a bank holiday, and US futures for the S and P 500 and Dow Jones Industrial Average each decreased by 0.2%.
The oil market reacted strongly to the developments, with Brent crude prices jumping 3.8% to $91.40 per barrel and US benchmark crude rising by the same percentage to $86.58.
In Asia, market performances were mixed amidst remarks by Federal Reserve Chairman Kevin Warsh, who hinted at potential interest rate hikes to combat inflation. Tokyo's Nikkei 225 slipped 0.1%, and Hong Kong's Hang Seng fell by the same margin, whereas South Korea's Kospi rose 0.5% and Shanghai's Composite Index increased by 0.9%.
China's official survey indicated a continued contraction in factory activity for the second consecutive month in August, despite minor improvements in production and new export orders. This was mirrored in other regional markets, with Australia's S and P/ASX 200 down 0.2%, and both Taiwan's Taiex and India's Sensex falling 0.4%.
On Wall Street, the previous Friday concluded with declines across the board. The S and P 500 dropped by 0.2%, the Dow saw a slight decrease, and the Nasdaq fell by 0.5%. Additionally, the two-year US Treasury yield rose to 4.35% from 4.22% following Warsh's speech at the Jackson Hole economic symposium. The currency market saw the dollar weaken against the yen, while the euro appreciated against the US dollar.