There was a drop in Asian stock market as all eyes were on insurgency in Iraq, upsetting oil supplies. The shares saw sudden drop, as there was concern that issues in Iraq could disturb oil exports.
On Sunday, insurgents (Islamic state of Syria and Iraq) seized the city of Tal Afar, while US increased safety for its staff in Baghdad. It’s been stated that more than thousand Govt. troops were killed in the accident. Some diplomatic staffs had even vacated the spot after the incident. United States has evacuated some workers, while investors are looking for the upcoming Fed Reserve’s policy review to take place this Wed.
Japanese stock dropped Monday early morning as fears over Iraq led to a stronger Yen on safe haven purchasing, although crude costs gained. Brent LCOc1 increased 0.5% to $113/barrel. It reached its peak level ($114.6) on Friday, which was its highest since last Sept. It added $4 and US crude gained 0.4% to reach the 107.34 mark, after touching its $107.68 peak on Friday.
Gold price rose after Iraqi crisis encouraged metal’s safe haven plea, while Aussie mining fell. Asia-Pacific MSCI index dropped 0.1%, though it reached a 3-year high couple of weeks ago. Nikkei (Japan) was down 0.9%, as there were lot of concerns regarding higher material costs and stronger yen. Car maker Mitsubishi sank, though there was report that it would collaborate with Siemens.
Panasonic Corp, Tokyo dropped 1.7%, while Topix sank nearly 1%. Echo Entertainment, Australia indicated some positive signs, following company’s revenue announcement, which were above the market predictions. Shanghai Composite Index gained 0.2%, as Li Keqiang (Chinese Premier) stated that he is pretty confident that the nation’s economy would reach 7.5% target growth. Fortescue Metals Group fell 1 percent, while S&P 200 Index was down by 0.4 percent and South Korean Kospi lost 0.1 percent.
Daiwa Securities’ technical analyst, Hikaru Sato stated – “Investors aren’t expecting material costs to rise soon and have an immediate impact on companies’ profits, but they are wary of these risks in the longer run. The geopolitical concerns are lowering risk appetite.”
Wall Street saw improvement in its stock rates; investors are looking forward to Fed revealing their Reserve policy on Wednesday. It’s been expected that if Federal upgrades economic view and central bank its yield forecast there would be slightly improvement in the economy. China is also planning to release its foreign direct investment data this week.