Asian Shares Sink As Risk Aversion Grips Markets

(RTTNews) - Asian stocks sank on Friday while the dollar surged, oil prices climbed and gold held near a record high below $2,400 per ounce after Israel launched strikes against Iran, in what appeared to be limited retaliatory action for last week's drone and missile barrage by Tehran.

Brent crude futures leapt more than 4 percent to more than $90 a barrel as the latest move by Israel threatened to push the region deeper into conflict.

However, oil gave up most initial gains and last held little changed after Iranian state media downplayed the attacks, saying the explosions heard in Isfahan were a result of the activation of Iran's air defense systems.

Also, the nuclear facilities in Iran's central Isfahan province are completely safe, the semi-official news agency Tasnim reported.

The International Atomic Energy Agency (IAEA) also confirmed that there has been no damage to Iranian nuclear sites.

Meanwhile, fresh hawkish comments from Federal Reserve officials also spurred risk aversion and sent investors flocking to buy safe-haven assets.

China's Shanghai Composite index slipped 0.29 percent to 3,065.26, outpacing its Asian peers on hopes of more government stimulus. Hong Kong's Hang Seng index dropped 0.99 percent to 16,224.14.

Japanese markets slumped as heightened geopolitical tensions and growing uncertainty over the outlook for U.S. interest rates spooked investors.

The Nikkei average plunged 2.66 percent to 37,068.35 in its sharpest daily fall since September 2022, while the broader Topix index settled 1.91 percent lower at 2,626.32.

Semiconductor companies including Advantest, Tokyo Electron and Screen Holdings plummeted 4-9 percent after Taiwan Semiconductor Manufacturing Co. scaled back its outlook for chip-market expansion.

Data released earlier in the day showed Japanese inflation slowed to 2.6 percent in March, largely in line with expectations.

Seoul stocks fell sharply, with the Kospi average ending down 1.63 percent at 2,591.86 after comments from Fed officials cast more doubt on the timing of rate cuts this year.

Australian stocks declined to reach a two-month low amidst geopolitical tensions. The benchmark S&P ASX 200 fell 0.98 percent to 7,567.30, with tech and property stocks leading losses. The broader All Ordinaries index closed down 1.03 percent at 7,817.40.

Northern Star Resources rose 1.3 percent and Santos climbed 1.8 percent as gold and oil prices surged as a result of escalating conflict between Israel and Iran.

Across the Tasman, New Zealand's benchmark S&P NZX-50 index slipped 0.34 percent to 11,796.21.

U.S. stocks ended mixed overnight as two-year Treasury yields climbed toward the 5 percent mark on hawkish comments from Fed officials and data showing unexpectedly faster growth in Philadelphia-area manufacturing activity in April and a resilient labor market.

The S&P 500 slipped 0.2 percent and the tech-heavy Nasdaq Composite shed half a percent to extend losses for a fifth day running and reach their lowest closing levels in almost two months, while the Dow finished marginally higher.