Oil gains and shares slip after the US strikes Iranian nuclear sites

BANGKOK AP Global markets appeared to take the U S strike against nuclear targets in Iran in stride as investors watched Monday to see how Iran will react The price of oil initially jumped more than before trading about cents higher U S stock futures and the majority share benchmarks in Europe and Asia declined The big unknown is what Iran will do analysts commented while the U S military s strike on three Iranian sites raised urgent questions about what remains of Tehran s nuclear venture I believe what we are thinking is or the thinking is that it is going to be a short conflict The one big hit by the Americans will be effective and then we ll get back to sort of business as usual in which affair there is no need for an immediate panicky type of reaction reported Neil Newman managing director of Atris Advisory Japan The price of Brent crude oil the international standard was up at a barrel U S crude also jumped gaining to a barrel The attacks Saturday raised the stakes in the war between Israel and Iran and the futures for the S P and the Dow Jones Industrial Average slipped The Nasdaq future contract fell Treasury yields were little changed In Europe Germany s DAX lost to and the CAC in Paris was down at Britain s FTSE edged lower to The conflict began with an Israeli attack against Iran on June that sent oil prices yo-yoing and rattled other markets Iran is a major oil producer and sits on the narrow Strait of Hormuz through which much of the world s crude passes Closing off the waterway would be technically intricate but it could severely disrupt transit through it sending insurance rates spiking and making shippers nervous to move without U S Navy escorts The situation remains highly fluid and much hinges on whether Tehran opts for a restrained reaction or a more aggressive program of action Kristian Kerr head of macro strategy at LPL Financial in Charlotte North Carolina commented in a commentary Iran may be reluctant to close down the waterway because it uses the strait to carriage its own crude mostly to China and oil is a major revenue source for the regime Speaking to Fox News on Sunday U S Secretary of State Marco Rubio stated disrupting traffic through the strait would be economic suicide and would elicit a U S response I would encourage the Chinese regime in Beijing to call them about that because they heavily depend on the Strait of Hormuz for their oil Rubio reported Tom Kloza chief arena analyst at Turner Mason Co explained he expects Iranian leaders to refrain from drastic measures and oil futures to ease back after the initial fears blow over Disrupting shipping would be a scorched earth possibility a Sherman-burning-Atlanta move Kloza declared Writing in a analysis Ed Yardeni a long-time analyst agreed that Tehran leaders would likely hold back They aren t crazy he wrote in a note to investors Sunday The price of oil should fall and stock markets around the world should climb higher Other experts weren t so sure Andy Lipow a Houston analyst who has covered oil markets for years stated countries are not inevitably rational actors and he wouldn t be surprised if Tehran lashed out for political or emotional reasons If the Strait of Hormuz was wholly shut down oil prices would rise to to a barrel reported Lipow That would translate to about a gallon at the pump and hurt consumers in other techniques he noted It would mean higher prices for all those goods transported by truck and it would be more complex for the Fed to lower interest rates Much of East Asia depends on oil imported through the Strait of Hormuz Taiwan s Taiex fell while the Kospi in South Korea initially lost but then regained chosen lost ground to fall to In Tokyo the Nikkei edged lower to with gains for defense contractors oil companies and miners helping to make up for broad losses The U S strike on Iran certainly is very good for defense equipment Newman of Atris Advisory mentioned noting that both Japan and South Korea have sizable military manufacturing hubs Australia s S P ASX fell to Hong Kong s Hang Seng regained lost ground climbing to while markets in mainland China advanced with gains for strength companies The Shanghai Composite index picked up to In currency dealings the U S dollar rose to Japanese yen from yen The euro climbed to from