Equity markets across the world traded in the red on Thursday as the war in West Asia escalated again, with the warring sides attacking each other’s energy units.
From the US to Japan and Hong Kong, the equity indices fell up to 2 percent, reversing the comparative stability of the last three days.
Dow Futures and S&P Futures were 0.02 percent and 0.07 percent lower, respectively, according to Bloomberg TV as of 1:30 ET on March 19.
The muted run came after the Dow Jones and S&P 500 slipped in Wednesday’s trade, ending lower by 1.63 percent (768 points) and 1.36 percent (91 points), respectively, while the Nasdaq declined almost 1.46 percent, or 327 points, to close at around 22,152.
Asian markets followed their American peers, with Japan’s Nikkei declining over 1,787 points or 3.24 percent, while South Korea’s Kospi plunged over 162 points or 2.74 percent, according to Bloomberg TV as of 1:30 ET. Similarly, Hong Kong’s Hang Seng also shed over 483 points or 1.86 percent.
On the domestic front, India’s Sensex and Nifty also traded in the red. While the former was down by up to 2.3 percent, or 1,735 points, the latter was trading at a loss of close to 2.22 percent, or 527 points.
The selloff in markets across the world started after the United States-Israel-Iran war further escalated, with Qatar’s Ras Laffan natural gas refinery facing severe damage. This diminished hopes of the energy crisis easing, and investors feared rising inflation.
In anticipation of tougher days ahead, the US Federal Reserve has kept the policy rate unchanged.
On the energy front, crude oil prices surged on Thursday, with the global benchmark Brent Crude hovering around the $112 per barrel mark. This is a rise of almost 4.3 percent from its previous close. The American WTI Crude also jumped close to $97 per barrel.
Investors have turned cautious, expecting the crisis to last longer than anticipated by the Donald Trump administration.
According to a report by Goldman Sachs, the surge in energy prices stemming from the war could shave about 0.3 percent off global GDP over the next year.
