Asia share markets slide amid renewed Middle East tensions

MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.6%

Asia share markets slid on Monday as renewed attacks in the Gulf pushed up oil prices and bond yields, while the AI boom is set to be tested by earnings from technology company Nvidia this week.

A drone strike caused a fire at a nuclear power plant in the United Arab Emirates, while Saudi Arabia reported intercepting three drones.

Meanwhile, the vital Strait of Hormuz remains closed to all but a few exceptions as Tehran formalises its control of the waterway that earlier carried 20% of the world’s oil trade.

Brent was trading up 1.2% at $110.63 a barrel, while U.S. crude jumped 1.0% to $106.42 a barrel.

Concerns energy costs would stay high and thus continue to drive inflation, saw global bond markets impacted on Friday.

Nikkei dropped 0.4%, having eased 2% last week though that was from record highs. South Korean stocks declined 2.1%, as the red-hot market cooled just a little after demand for semiconductors led it to all-time highs.

MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.6%. China’s markets hit their highest in more than four years last week, but will have to weather data on April retail sales and industrial output later in the session.

In forex markets, risk aversion has tended to benefit the U.S. dollar as the world’s most liquid currency. The U.S. is also a net energy exporter, giving it a relative advantage over Europe and Asia.

The euro sat at $1.1620, after declining 1.4% last week. The pound stood at $1.3318, having dipped 2.3% last week as political instability added to already intense pressure on the gilt market.

In commodity markets, gold was flat at $4,540 an ounce, having drawn little support so far as a safe haven or as a hedge against inflation risks.