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World Shares Mixed on US, Iran Strikes 07/13 04:51
Oil prices jumped and world shares were mixed on Monday after the U.S.
carried out airstrikes and Iran retaliated.
BANGKOK (AP) -- Oil prices jumped and world shares were mixed on Monday
after the U.S. carried out airstrikes and Iran retaliated.
In early European trading, Germany's DAX added 0.2% to 25,105.55 and the CAC
40 in Paris edged 0.1% higher, to 8,347.26. Britain's FTSE 100 also was up just
0.1%, at 10,506.86.
U.S. stock futures were mixed, with the contract for the S&P 500 down 0.3%
and that for the Dow nearly unchanged. The Nasdaq composite future lost 0.9%.
The price of Brent crude, the international standard, climbed as much as
nearly 5% early Monday before falling back. As of early morning in Europe, it
was up 2.3% at $77.72 per barrel, while U.S. benchmark crude added 2.1% to
$72.92 per barrel.
Prices for both types of crude oil recently had slipped back to around the
levels they were at before the war with Iran began after the two sides set an
interim agreement on ending the conflict and ships resumed transporting oil
through the Strait of Hormuz.
However, the United States launched several waves of strikes on Iran into
Monday morning over an Iranian attack on a container ship in the strait that
set it ablaze and left a crew member missing over the weekend. Iran retaliated
by targeting countries across the Middle East.
In Asian share trading, Tokyo's Nikkei 225 index lost 1.9% to 67,242.73,
while in Seoul, the Kospi declined 9% to 6,806.93. It's now at its lowest level
since early May.
Shares in South Korean memory chipmaker SK Hynix, which soared 13% in their
debut Friday on Wall Street, slumped 15.4% in Seoul. Its bigger rival Samsung
Electronics sank 10.7%.
Elsewhere in Asia, Hong Kong's Hang Seng edged 0.2% higher, to 24,212.36,
and the Shanghai Composite index shed 2.1% to 3,913.79.
In Australia, the S&P/ASX 200 was nearly unchanged at 8,808.50.
U.S. stocks ticked higher Friday after investors showed sustained appetite
for winners of the artificial-intelligence boom. The S&P 500 rose 0.4% and the
Dow Jones Industrial Average added 0.3%. The Nasdaq composite climbed 0.3%.
SK Hynix's shares jumped immediately after trading began in the midday hours
after it raised roughly $26.5 billion by selling American depositary shares at
a price of $149 each.
SK Hynix's stock in Seoul had already surged more than 600% over the last
year thanks to euphoria around AI. The boom has created real profits due to
surging demand for computer memory. But it has also raised worries that AI
stock prices have shot have too high and that all the world's spending on chips
and data centers won't be able to produce enough productivity and profit growth
to make it worth it.
"The reason why this stock, along with other memory chipmakers, has gone
parabolic is that AI demand has somehow created the perception that a sector
historically defined by boom-and-bust cycles could remain permanently in the
boom phase," Ipek Ozkardeskaya of Swissquote said in a commentary.
SK Hynix plans to double its production capacity, or possibly more, to keep
up with demand. However, "Technological breakthroughs, more efficient AI models
or simply a slowdown in AI infrastructure investment could quickly turn the
market into one of oversupply," she said.
Similar concerns apply to many AI stocks as they've grown into some of Wall
Street's most influential because of their huge valuations. Beyond that,
investors will be focusing on earnings reports, watching to see if corporate
profits are growing fast enough to justify big gains in stock prices, which are
broadly near records.
This week will bring earnings reports from many of the biggest U.S. banks,
including Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Wells
Fargo on Tuesday alone.
Meanwhile, worries about how continued fighting with Iran will affect the
global flow of crude are clouding the outlook both for energy costs and overall
inflation.
High bond yields have been weighing on financial markets worldwide since
more expensive oil and high inflation could push the Federal Reserve and other
central banks to raise interest rates.
Higher rates can keep a lid on inflation, but they also slow the economy and
hurt prices for all kinds of investments.
In other dealings early Monday, the U.S. dollar rose to 162.01 Japanese yen
from 161.72 yen. The euro rose to $1.1435 from $1.1408.
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