Oil slips below $78 as Iran tensions rattle markets, tech steadies
Crude prices retreated from an 8% surge after Washington revoked Iranian sanctions waivers, while Asian technology stocks sought a floor amid a prolonged selloff.
Brent crude fell 0.1% to $77.98 and West Texas Intermediate dropped 0.5% to $73.16 in late Asian trading, pulling back from a dramatic spike that saw Brent top $80 a barrel. The reversal came as investors parsed a sudden escalation in Middle East hostilities after Donald Trump declared a ceasefire with Iran was over and revoked a temporary sanctions waiver for Iranian oil.
The US president ordered new strikes in retaliation for attacks on shipping in the Strait of Hormuz, a conduit for a fifth of the world's oil. "Trump’s remarks set sparks flying – the comments underscored fears that we could see further escalation and a return to pre-MOU conditions," said Neil Wilson at Saxo Markets. "But it clearly seems the risk of a total breakdown in negotiations has increased and markets are reflecting this fresh dynamic."
The geopolitical shock hit markets already strained by a deep selloff in technology stocks driven by doubts over the returns on massive artificial intelligence investments. Seoul’s Kospi, which has tanked more than 20% from a record high in June, swung wildly before closing up 0.6%.
Investors found a focal point in SK Hynix, the South Korean chip giant whose US listing was more than seven times oversubscribed ahead of its Friday pricing. Observers suggest the American Depository Receipt sale could raise as much as $28 billion. While Hynix’s Seoul-listed shares jumped almost 7% on Thursday, they remain more than 30% below last month's peak.
Regional supply chains face an additional layer of risk from Typhoon Bavi, the largest storm to hit Taiwan since 1995. The 1,000km-wide typhoon is expected to make landfall in eastern China between Fujian and Zhejiang provinces this weekend, threatening vital manufacturing hubs. The storm arrives as southern China grapples with flooding that killed at least 39 people this week, a trend exacerbated by record-hot ocean temperatures and the return of El Niño.
Broader equity markets were mixed. Tokyo’s Nikkei 225 added 1.4% and Shanghai gained 1.7%, while Hong Kong’s Hang Seng fell 0.7%. European indices were muted, with Paris and Frankfurt posting modest gains while London dipped.
