Investors brace for sharemarket volatility, oil price surge after US bombs Iran
Investors are expecting a jump in oil prices, equity market volatility and a rush to safe-haven assets this week, after the US launched strikes on Iran's nuclear facilities on Sunday.
In a major escalation of the conflict in the Middle East, US president Donald Trump announced on Sunday the US had 'completely and totally obliterated' Iran's uranium enrichment facilities, as he warned Iran should 'make peace' or face 'far greater' future attacks.
The attack deepens US involvement in the Middle East, and investors on Sunday mulled the likely market scenarios, including what it could mean for share prices, the price of oil, and currency and bond markets.
Futures, which were set before the attack, point to a 0.2 per cent decline in the ASX 200 on Monday, after Wall Street's S&P 500 fell 0.2 per cent on Friday, amid ongoing fears over the escalating conflict. The Dow Jones added 0.1 per cent and the Nasdaq lost 0.5 per cent.
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'I think the markets are going to be initially alarmed, and I think oil will open higher,' said Mark Spindel, chief investment officer at Potomac River Capital.
'We don't have any damage assessment and that will take some time. Even though he has described this as 'done', we're engaged. What comes next?' Spindel said.
'I think the uncertainty is going to blanket the markets, as now Americans everywhere are going to be exposed. It's going to raise uncertainty and volatility, particularly in oil,' he added.
Spindel, however, said there was time to digest the news before markets open and said he was making arrangements to talk to other market participants.
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