Yemen conflict hits stocks hard but sends oil price surging
LONDON (AP) — Saudi Arabian strikes on key military installations in Yemen hit stock markets hard Thursday and sent oil prices surging.
KEEPING SCORE: In Europe, France’s CAC 40 slid 1.6 percent to 4,939 while Germany’s DAX dropped 1.9 percent to 11,643. Britain’s FTSE 100 shed 1.4 percent to 6,890. Wall Street was poised for sizeable losses at the open, with both Dow futures and the broader S&P 500 futures down 0.6 percent, a day after recording substantial losses in the wake of weak economic data that reinforced concerns over the U.S. economic recovery.
ENERGY: Oil prices were in the ascendant amid concerns of spreading turmoil in the Middle East after Saudi Arabia bombed key military installations in Yemen overnight. The benchmark U.S. crude futures contract was up $2.20 at $51.41 a barrel in electronic trading on the New York Mercantile Exchange. The Brent crude futures contract, a benchmark for international oils, was up $2.34 at $58.81 in London.
YEMENI WORRIES: The main driver in markets was the news from Yemen where Saudi Arabia has launched strikes, along with others, to oust Shiite rebels that forced the country’s embattled president to flee. Some of the strikes hit positions in the country’s capital, Sanaa, and flattened a number of homes near the international airport.
ANALYST TAKE: “The conflict has the potential to act as a drag on oil supplies as most oil tankers from Arab producers must pass by the Yemen coastline in order to get through the Red Sea and Suez Canal,” said Craig Erlam, senior market analyst at OANDA.
ASIA SCORECARD: Japan’s Nikkei 225 fell 1.4 percent to 19,471.12 while Hong Kong’s Hang Seng shed 0.1 percent to 24,497.08. South Korea’s Kospi lost 1 percent to 2,022.56. Australia’s S&P/ASX 200 shed 1.6 percent to 5,879.10 while China’s Shanghai Composite rose 0.6 percent to 3,682.10. Markets in Southeast Asia were mixed. India and Taiwan fell.
CURRENCIES: The euro rose 0.3 percent to $1.0995 while the dollar fell 0.7 percent to 118.69 yen.