New York, Apr 2 (AP) Oil rose more than 10 per cent and US futures tumbled Thursday after President Donald Trump said in his first national address since the Iran war began that the United States will escalate its campaign in the coming weeks.
Futures for the S and P 500 tumbled 1.5 per cent before the opening bell, while futures for the Dow Jones Industrial Average lost 1.4 per cent. Nasdaq futures slid 2 per cent.
Thursday is the last day of trading this week due to the Good Friday holiday. Markets have not posted a weekly gain since the war began in late February.
A spokesman for Iran’s military insisted Thursday that Tehran maintains hidden stockpiles of arms, munitions and production facilities.
“The centres you think you have targeted are insignificant, and our strategic military productions take place in locations of which you have no knowledge and will never reach,” Lt. Col. Ebrahim Zolfaghari claimed.
Just before Trump began his address — in which he said US “core strategic objectives are nearing completion” — explosions were heard in Dubai as air defences worked to intercept an Iranian missile barrage.
Trump did not mention a looming deadline he set for Iran to open the Strait of Hormuz, the critical waterway for global oil and gas transport, after he threatened Iran earlier with US attacks on its energy infrastructure if the strait was not reopened. He did not offer a clear path to end the supply disruptions that have sent energy prices soaring.
Oil prices shot sharply higher following Trump’s remarks. The price US crude on Thursday actually shot higher than the type of crude that has been bottled up by the near closure of the Strait of Hormuz.
Benchmark US crude rose USD 10.11 to USD 110.24 a barrel outpacing Brent, the international benchmark. Brent jumped more than 8 per cent to USD 109.38.
“The market has shown disappointment because the speech President Trump made was far less than what the market expected,” said Takashi Hiroki, chief strategist at Monex in Tokyo. “There were no concrete details about the end of the hostilities with Iran.” “What the market wants is a clear outline for the ceasefire,” he said.
In overnight equities trading, General Motors slid more than 2 per cent after the automaker reported a nearly 10 per cent decline in first quarter sales. That dragged most automakers lower early Thursday as several others prepare to post their latest results.
At midday in Europe, Britain’s FTSE 100 was down 0.6 per cent, France’s CAC 40 fell 1.3 per cent, and Germany’s DAX lost 2.4 per cent.
Asian shares closed lower. Tokyo’s Nikkei 225 was down 2.4 per cent to 52,463.27 on Thursday. South Korea’s Kospi lost 4.5 per cent to 5,234.05, also after government data showed consumer prices in March rose 2.2 per cent from a year earlier on soaring fuel costs.
Hong Kong’s Hang Seng fell 0.7 per cent to 25,116.53, the Shanghai Composite index was down 0.7 per cent to 3,919.29.
Australia’s S and P/ASX 200 dropped 1.1 per cent, while Taiwan’s Taiex traded 1.8 per cent lower.
Gold and silver prices fell. Gold was down 3.9 per cent to USD 4,627 per ounce, while silver lost 6.9 per cent to USD 70.85. (AP) PY PY
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