Concerns over Gulf conflict escalation weigh on markets

AP TOKYO: Shares in many markets fell on Friday as investors fretted over the mounting crisis in the Arabian Gulf and lingering worries about trade conflict between the US and China.
The US has blamed the suspected attacks on Thursday on two oil tankers near the strategic Strait of Hormuz on Iran. That has triggered the latest bout of selling in the markets with investors worrying about a potential escalation. The key concern centers on the supply of oil. One third of all oil traded by sea, which amounts to 20 percent of oil traded worldwide, passes through the strait.
The US military on Friday released a video it said shows Iran’s Revolutionary Guard removing an unexploded limpet mine from one of the oil tankers targeted near the Strait of Hormuz, suggesting that Iran sought to remove evidence of its involvement from the scene. Iran denies being involved.
“The attack on two oil tankers in the Gulf of Oman has raised the geopolitical temperature even further in the region, at a time when it is high already, given the strained relations between the US and Iran,” said Michael Hewson, chief market analyst at CMC Markets.
In Europe, Germany’s DAX tumbled 0.8 percent to 12,069 in midday trading. Britain’s FTSE 100 fell 0.5 percent to 7,328 and France’s CAC 40 also dipped 0.5 percent to 5,348.
Earlier, Japan’s benchmark Nikkei 225 edged up 0.4 percent to finish at 21,116.89. Hong Kong’s Hang Seng slipped 0.7 percent to 27,118.35, while the Shanghai Composite fell nearly 1 percent to 22,881.97.