Shanghai — Asian shares fell on Friday, erasing early gains, while oil prices spiked after US air strikes in Iraq killed a top Iranian commander, heightening geopolitical tension.
China’s CSI300 index, one of the world’s best-performing indices in 2018, also turned negative, losing 0.25%. Australian shares were 0.66% higher, but that was off earlier highs. Middle Eastern tensions upset a rally for the MSCI index, which finished at its highest close in more than 18 months on Thursday.
“You have from both a policy and trade perspective a favourable framework for ... risk assets for the weeks to come,” said Frank Benzimra, head of Asia equity strategy at“The issue in our view, and that is the central scenario, is beyond these few weeks — where could we see a further correction?” he said, noting that the US is unlikely to enjoy further fiscal stimulus before the presidential election in November.
But US stock futures pointed to a grim day on Friday after the air strikes, with S&P e-minis shedding 0.8%.While equity markets turned lower, oil prices surged on news of Soleimani’s death, with global benchmark Brent crude shooting 3.02% higher to $68.25 a barrel and US West Texas Intermediate crude jumping 2.75% to $62.86 a barrel.