By Amanda Lee
Oil prices gained again as Israel and Iran continue air attacks against each other, sustaining a sense of uncertainty across markets in Asia.
Sirens sounded across Israel early Monday, warning of another barrage of missiles from Iran. That came after Israel's military said it was striking dozens of targets in Iran on Sunday.
"The furious exchange of fire between Israel and Iran leaves little doubt about unprecedented escalation in the Iran-Israel conflict," said Vishnu Varathan at Mizuho Securities.
That said, the hope for now is that the conflict would not erupt into an all-out war that threatens regional stability, he added.
Front-month WTI crude-oil futures were last up 1.0% at $73.70 a barrel, while front-month Brent climbed 0.8% to $74.82 a barrel. That followed a surge on Friday when news of Israel's attack first broke, sparking double-digit percentage gains.
Spot gold was last down 0.25% at $3,423.71 a troy ounce, giving up earlier gains.
"After three consecutive days of gains at the end of last week, the gold market is entering a sensitive yet highly promising phase," said Linh Tran at XS.com. The precious metal's breakout above the key psychological resistance level of $3,400/oz opens the door for further upside, but investors will also be weighing central bank action during the week, the market analyst said.
Stock markets rebounded somewhat from the weakness at the end of last week, but volatility persisted.
Japan's Nikkei Stock Average and South Korea's Kospi were 1.2% higher each in afternoon trading.
Hong Kong's Hang Seng Index was 0.1% higher, while China's Shanghai Composite Index was up 0.2%, reversing opening losses after the release of Chinese economic data. Singapore's Straits Times Index was 0.3% lower, as was Malaysia's KLCI.
Futures tied to U.S. indexes were mostly steady, while in currency markets, the U.S. dollar was mostly mixed against Asian currencies.
While USD rebounded last Friday, constrained price action suggests it has yet to fully reclaim its safe-haven status, said analysts on Maybank's FX and Rates Strategy team.
Focus will remain on the Middle East developments.
Economists at DBS say many scenarios are plausible in the coming days, hardly any of which are positive.
The market response so far seems centered on the less dire possibilities. "While hoping the market's view is the right one, which is that no oil shock is about to transpire, it is important to recognize the criticality of the conflict-afflicted region at stake," DBS chief economist Taimur Baig said.
A major risk lies in the disruption of key shipping lanes through which a lot of the world's energy supply flows.
Mizuho's Varathan sees incentives for de-escalation on both sides of the Israel-Iran conflict that could curb tensions.
"Nonetheless, the situation is highly combustible, as the scope for miscalculations between the various parties involved is exceptionally high," he said.
Write to Amanda Lee at amanda.lee@wsj.com
(END) Dow Jones Newswires
June 16, 2025 01:32 ET (05:32 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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