Hong Kong, China: Global markets opened the week in a reset mode on Monday as easing geopolitical tensions between the United States and Iran sparked a steep sell-off in oil, while a stronger US dollar continued to batter precious metals.
Crude prices plunged more than three percent in early Asian trading after US President Donald Trump signalled optimism about reaching an agreement with Tehran, dialling back fears of an imminent military confrontation.
The remarks came despite recent escalations, including Washington’s criticism of Iran’s handling of anti-government protests and the deployment of a US aircraft carrier group to the Middle East.
Iran’s Supreme Leader Ayatollah Ali Khamenei had warned over the weekend that any US attack would ignite a regional conflict. Trump, responding to the warning, struck a measured tone, saying he hoped diplomacy would prevail, while leaving the alternative open.
According to AFP, the oil’s decline was amplified by a surging dollar, which gained momentum after Trump announced Kevin Warsh as his pick to lead the US Federal Reserve. Investors see Warsh, a former Fed governor, as a staunch inflation hawk, fuelling expectations of tighter monetary policy and bolstering confidence in the greenback.
The appointment also helped calm nerves over the central bank’s independence following Trump’s repeated criticism of current Fed chair Jerome Powell. Analysts noted that the choice signalled policy continuity rather than a dramatic shift.
The dollar’s rally sent shockwaves through dollar-denominated assets. Gold and silver, already reeling from Friday’s collapse, extended losses on Monday. Gold fell as much as six percent to around $4,586, while silver slid roughly 11 percent to $75, both sharply off last week’s record highs. Reduced geopolitical risk further undermined demand for the traditional safe-haven metals.
Equity markets across Asia largely followed Wall Street lower, as investors digested fresh concerns about the scale of investment pouring into artificial intelligence and the timeline for meaningful returns.
Tech-heavy Seoul dropped more than two percent, while Hong Kong, Shanghai, Sydney, Singapore, Taipei and Manila also posted notable declines. Tokyo bucked the regional trend with modest gains.
Overall, markets appeared to be adjusting to a new mix of easing geopolitical risk, firmer US monetary expectations and growing scrutiny of high-growth tech valuations.
– Key figures at around 0230 GMT –
Tokyo – Nikkei 225: UP 0.2 percent at 53,422.01 (break)
Hong Kong – Hang Seng Index: DOWN 1.7 percent at 26,919.07
Shanghai – Composite: DOWN 0.8 percent at 4,083.84
Euro/dollar: UP at $1.1870 from $1.1856 on Friday
Pound/dollar: UP at $1.3693 from $1.3688
Dollar/yen: UP at 155.00 yen from 154.64 yen
Euro/pound: UP at 86.68 pence from 86.63 pence
West Texas Intermediate: DOWN 3.5 percent at $62.92 per barrel
Brent North Sea Crude: DOWN 3.3 percent at $67.02 per barrel
New York – Dow: DOWN 0.4 percent at 48,892.47 (close)
London – FTSE 100: UP 0.5 percent at 10,223.54 (close)
