Singapore, Asia-Pacific markets pare losses after US strikes on Iran; oil prices give back some gains

Asia-Pacific markets recovered some losses while oil prices gave back some gains by Monday (Jun 23) afternoon,following declines in the morning after the US launched strikes against three nuclear facilities in Iran over the weekend.

Singapore’s Straits Times Index (STI) was down 0.4 per cent. DBS declined 0.3 per cent to S$43.19. OCBC slid 0.1 per cent or S$0.08 to S$15.82 and UOB fell 1 per cent or S$0.34 to S$34.55.

Greater China markets declined in early trade after the open. Hong Kong’s Hang Seng Index was up 0.6 per cent after earlier losses, while in the mainland, the CSI 300 Index rose 0.5 per cent after marginal declines.

Japan’s Nikkei 225 edged down 0.1 per cent, while South Korea’s Kospi was down 0.2 per cent. Australia’s ASX fell around 0.3 per cent.

Oil prices surged in early trade on Monday, with Brent and the main US crude contract WTI both climbing more than 4 per cent to hit their highest price since January before paring gains. Brent last jumped 2.7 per cent to US$79.06 per barrel after 9 am Singapore time and WTI was up 2.8 per cent at US$75.87.

By Monday afternoon, past 2 pm Singapore time, Brent walked back some gains to trade around US$78.23 per barrel, while WTI was at US$75.

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Crude prices already spiked last week after Israel attacked Iran. Brent had risen 13 per cent since the conflict began on Jun 3, while WTI had gained around 10 per cent, according to Reuters data on Monday morning.

The US dollar index rose around 0.3 per cent to 99. It last strengthened slightly around 0.2 per cent to the Singapore dollar at around S$1.2899, after 2.30 pm Singapore time.

On Saturday, US President Donald Trump announced strikes against three Iranian nuclear facilities, boosting Israel’s efforts to destroy Iran’s nuclear programme. This followed more than a week of Israeli air attacks on Iran’s nuclear and military facilities and US attempts to persuade Iran to reach a deal to dismantle its nuclear programme.

In response, Iran on Sunday threatened US bases in the Middle East, intensifying concern of a deepening of conflict in the region.

An adviser to Iran’s supreme leader Ayatollah Ali Khamenei Ali said bases used by US forces could be attacked in retaliation, given that the US “has attacked the heart of the Islamic world and must await irreparable consequences”.

He warned that countries in the region or elsewhere from which the US launched its strikes would be considered legitimate targets by Iran’s armed forces.