Oil jumped in Asian trading on growing geopolitical fears after a US warship shot down an Iranian drone in the Strait of Hormuz, while Asian markets rallied on rising expectations of monetary easing by the US Federal Reserve later this month. 

Brent crude, the international benchmark, rose 2 per cent in morning trading to $63.17. West Texas Intermediate, the US marker, gained 1.8 per cent. 

The moves came after US President Donald Trump said the US navy had shot down an Iranian drone that came within 1,000 yards of an assault vessel after it ignored “multiple” calls to stand down. Tensions in the Gulf have threatened to boil over, raising oil supply fears, after Iran’s Revolutionary Guards said earlier on Thursday that it had seized a foreign vessel. 

Meanwhile, all major bourses in Asia rose following comments by New York Fed president John Williams that “it’s better to take preventative measures than to wait for disaster to unfold”. Investors took that as a sign that the Fed could enact deeper rate cuts, with markets now pricing in a 40 per cent chance of a 50 basis point cut in July, according to Bloomberg. 

Japan’s Topix made the largest gain, rallying 1.8 per cent, while China’s CSI 300 rose 1.1 per cent and Hong Kong Kong’s Hang Seng added 1 per cent. Australia’s S&P/ASX 200 was up 0.8 per cent in morning trading. 

The moves followed a strong lead from Wall Street, with equities snapping a two-day losing streak. The S&P 500 pared earlier losses to rise 0.4 per cent following Mr Williams’ comments. 

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Markets Briefing is a concise look at global markets, updated throughout the trading day by Financial Times journalists in Hong Kong, New York and London. Feedback? Write in the comments below or send us an email.



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