Wall Street sank after US President Donald Trump tweeted that Russia needs to “get ready” for US missiles being fired at Syria.
Markets at 7:10am (AEDT):
- ASX SPI 200 futures -0.2pc, ASX 200 (Wednesday’s close) -0.5pc at 5,829
- AUD: 77.57 US cents, 54.7 British pence, 62.7 Euro cents, 82.85 Japanese yen, $NZ1.05
- US: Dow Jones -0.9pc at 24,189, S&P 500 -0.6pc at 2,642, Nasdaq -0.4pc at 7,069
- Europe: FTSE -0.1pc at 7,257, DAX -0.8pc at 12,294, Euro Stoxx 50 -0.5pc at 3,420
- Commodities: Brent crude +1.4pc at $US72/barrel, spot gold +1pc at $US1,352.94/ounce
Markets were caught off guard by the escalation in geopolitical tensions, with the Dow Jones dropping 219 points, or 0.9 per cent, to 24,189.
As for the S&P 500 and Nasdaq, they fell by 0.6 and 0.4 per cent respectively.
Oil was the biggest winner overnight, with Brent crude oil surging 1.4 per cent to $US72 a barrel.
Although Syria is not a major oil producer, any sign of conflict in the region tends to trigger concern about disrupted oil flows across the wider Middle East, where the major producers are based.
Gold also made significant gains, rising by 1 per cent to $1,352.94, as investors poured their money into safe-haven assets.
It was only yesterday that global markets surged over relief that China’s President Xi Jinping pledged to lower import tariffs and open up the Chinese economy.
Also weighing on global markets were the latest minutes from the Federal Reserve, which showed the US central bankers are expecting inflation to rise in the coming months.
This sparked concerns that American interest rates might rise faster than expected this year.
The Australian share market is likely to fall when it opens for trade today — given the weak lead from US markets, and ASX futures falling 0.2 per cent.
As for currencies, the Australian dollar has fallen slightly to 77.6 US cents, 54.7 British pence and 62.7 euro cents.
More to come.