Shares tumble as Trump and Iran trade threats

The prospect of prolonged geopolitical tension continues to weigh heavily on markets

Major indices were a sea of red on Monday as markets reacted to the ratcheting of tensions in the Middle East in the aftermath of the US assassination of Qasem Soleimani

After President Trump and Iran spent the weekend trading threats, investors were worried by the prospect of a prolonged period of tension in the highly volatile oil-producing region.

In the US, the Dow Jones was down 120 points, or 0.43 per cent, at 10am EST. The tech-focused Nasdaq had fallen by 0.28 per cent at the same time. Every industry sector was trading down apart from energy, according to analysis by Reuters.

America was following a path ploughed by Asia and Europe. Japan’s Nikkei ended the day nearly 2 per cent down, the result of both global geopolitical tension and disappointing domestic factory output figures for December.

Hong Kong’s Hang Seng index was down 0.79 per cent, but China’s Shanghai Composite bucked the trend, closing flat.

London’s FTSE had lost 47 points at close, down 0.62 per cent. The German Dax was hit even harder, losing 92 points and 0.70 per cent.

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Oil prices topped $70 a barrel on the fear of disrupted supplies, and have now risen more than 5 per cent since the attack that killed Qasem Soleimani last week. Investors also flocked to safe haven commodity gold, which hit a seven-year high.

Despite rising tensions in the Middle East, better than expected business confidence figures helped sterling bounce back from last week’s losses, rising by over 0.3 per cent against the euro and 0.5 per cent against the dollar by mid afternoon (GMT) on Monday.

Bitcoin also enjoyed a positive session, trading at around $7,530 by late afternoon GMT, 2.36 per cent up.

FURTHER READING: Gold surges to 7-year high following US-Iran standoff

FURTHER READING: How Middle East conflicts have affected oil markets in the past

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