Economy
Global markets turmoil deepens on widening conflict in Middle East
Asian stocks slumped on Tuesday and European stock markets also dived on opening, while energy prices spiked, as the U.S.-Israeli war on Iran and its retaliatory attacks drove volatility across global financial markets and roiled companies worldwide.
A selloff in stocks deepened and the dollar strengthened as the widening conflict in the Middle East fuelled concerns about energy prices and their impact on the global economy.
Shares in South Korea sank 7.2% as markets reopened after a holiday on Monday, to 5,791.91.
Japan’s benchmark Nikkei 225 sank 3.1% to finish at 56,279.05. Like other resource-poor countries in the region, Japan could be especially hit by the lack of access to the Strait of Hormuz, since much of its oil and natural gas is shipped through there.
In the rest of the region, Australia’s S&P/ASX 200 lost 1.3% to 9,077.30, while Hong Kong’s Hang Seng shed 1.2% to 25,737.86 and the Shanghai Composite index lost 1.4% to 4,122.68.
Stocks of airlines, including American Airlines, United and Delta, were some of Monday’s biggest losers on Wall Street. Higher oil prices threaten their already big fuel bills, while the fighting in the Middle East has also closed airports and left travelers stranded.
The losses cascaded in Asia, with ANA stock down 3.3%, while Japan Airlines fell 6.4%, Korean Air declined 10.3% and Qantas Airways lost 1.8%.
Europe’s benchmark STOXX 600 index also fell 2.7% in early trading on Tuesday – on track for its biggest daily decline since April – following a 1.7% drop on Monday.
Meanwhile, oil prices soared close to 5% and European natural gas prices rocketed for a second day running as the war disrupted Middle East exports.
U.S. S&P 500 e-mini futures were down 1.6%, suggesting the selloff may engulf Wall Street later following a volatile session on Monday that saw the S&P 500 rally from an early decline to close flat and the Nasdaq Composite climb 0.4%.
On Monday, U.S. President Donald Trump sought to justify a broad, open-ended war on Iran, saying the campaign was ahead of expectations. Front and center on traders’ minds is a dramatic surge in oil and natural gas.
Gas price concerns
“For Western Europe, the most notable development is another surge in natural gas prices… which is bringing back quite a lot of fears of potentially a repeat of what we saw in 2022, when Russia invaded Ukraine,” said George Moran, European macro strategist at RBC Capital Markets.
“It feels like the market is interpreting this as much more of an inflationary shock than a growth shock. Of course, it could still have a growth impact,” he said. In natural gas markets, benchmark European LNG prices leapt by 25%, having jumped 39% on Monday, while U.S. natural gas futures were up nearly 6%.
Qatar halted its production of liquefied natural gas (LNG) on Monday, prompting precautionary shutdowns of oil and gas facilities across the Middle East.
Qatari LNG production makes up about 20% of global supply. An official from Iran’s Revolutionary Guards said on Monday that the Strait of Hormuz was closed to marine traffic and the country would fire on any ship trying to pass.
Brent crude futures tacked on another 4.2% to $80.96 on Tuesday morning, up more than 11% on the week. A basket of European oil and gas stocks has risen 1.2% this week.
Risk scenarios
Investors are grappling with the uncertainty over how long the conflict might last, with no end to hostilities in sight.
The U.S. embassy in Riyadh was hit by two drones, resulting in a limited fire and some material damage, the kingdom’s defense ministry said in a post on X on Tuesday.
“Events like that are adding to fears about a more protracted conflict,” wrote Deutsche Bank research analysts in a morning note.
They added that there are signs investors are still pricing the conflict as temporary rather than protracted.
“In particular, it has mainly been the front end of energy curves that have seen sharp spikes, while longer-dated contracts have moved much less,” they wrote.
On Tuesday, Israel’s Prime Minister Benjamin Netanyahu said he expected the war against Iran was “not going to take years.”
The surge in energy prices complicates the Federal Reserve’s (Fed) efforts to keep inflation under control, with policymakers already showing signs of division around the impact of artificial intelligence on the U.S. economy. The U.S. will take action to mitigate rising energy prices due to the spike in the price of oil, Secretary of State Rubio said on Monday.
ISM manufacturing data released on Monday showed U.S. activity grew steadily in February, but a gauge of factory gate prices raced to a near 3-1/2-year high amid tariffs, highlighting upside pressure on inflation even before the attacks on Iran.
Fed funds futures are pricing an implied 95.4% probability that the U.S. central bank will hold rates at the end of its two-day meeting on March 18, according to the CME Group’s FedWatch tool.
The odds of a June hold, previously below 50%, edged up on Monday and are now slightly better than a coin toss.
The dollar index, which measures the performance of the U.S. currency against six others, held close to a six-week high at 99.07 as investors shunned those currencies they perceive to be most vulnerable to higher energy prices.
The yield on the U.S. 10-year Treasury note was up nearly 5 basis points at 4.1%.
With the dollar holding strong, gold was down 1.2% at $5,266 an ounce. Bitcoin fell 3.6% to $66,925.7
Türkiye’s stock exchange, Borsa Istanbul, has been accepted as a “Recognised Stock Exchange” by His Majesty’s Revenue and Customs (HMRC), the U.K.’s tax, payments and customs authority, the institution said in a statement on Wednesday.
“Aiming to make our capital markets more visible and accessible, particularly among U.K.-based investors, Borsa Istanbul, with this step, also contributes to efforts to increase foreign investors’ interest in our markets,” it said.
Moreover, with recognition of Borsa Istanbul, “it will be possible for investors resident in the United Kingdom to benefit from tax advantages on their investments in our capital markets,” it added.
“Income earned by holders of Individual Savings Accounts (ISA) from their investments in ‘Recognised Stock Exchanges’ is exempt from taxation in the United Kingdom,” the statement further said.
It also mentioned that lease certificates traded on such recognized exchanges are evaluated under the category of “Alternative Finance Investment Bonds” in the U.K., which it said, “simplifies investors’ decision-making and reporting processes and reduces the compliance burden.”
In addition, it suggested that a “Recognised Stock Exchange” is a designation attributed by His Majesty’s Revenue and Customs “to qualified exchanges that meet certain criteria,” explaining that it means that thereafter it is officially recognized within the scope of U.K. tax legislation.
Borsa Istanbul also provided a list of “Recognised Stock Exchanges,” including major exchanges operating in various countries, such as the “New York Stock Exchange,” “Nasdaq,” “Euronext,” “London Stock Exchange” and others.
Anadolu Agency (AA) reported earlier this month that Turkish authorities were weighing different incentives to draw global investors. The measures come amid ongoing global crises and reportedly include lowering corporate tax for manufacturer-exporters, while also special tax regimes for foreigners are said to be under consideration.
Turkish markets have managed to maintain the positive trend they built at the start of the year during the first quarter and throughout April, despite the conflict between the U.S., Israel and Iran.
Oil prices jumped on Wednesday, reversing earlier losses after reports of gunfire attacks on at least three container ships in the Strait of Hormuz and a lack of progress in peace talks between the U.S. and Iran.
Brent crude futures were up 73 cents, or 0.7%, at $99.21 a barrel at 1049 GMT. West Texas Intermediate futures were up 59 cents, or 0.7%, to $90.26. Both benchmarks climbed about 3% on Tuesday.
At least three container ships were hit by gunfire in the Strait of Hormuz on Wednesday. Iran’s Revolutionary Guards seized two vessels for what it described as maritime violations and transferred them to Iranian shores, the semi-official Tasnim news agency reported.
Iran and the U.S. have imposed restrictions on ships using the strait, which until the Iran war began at the end of February had carried about 20% of global oil and liquefied natural gas supplies.
Earlier, U.S. President Donald Trump said he would indefinitely extend the cease-fire with Iran, hours before it was due to expire. Neither side showed up for peace talks in Pakistan.
The cease-fire announcement appeared to be unilateral, and it was not immediately clear whether Iran, or U.S. ally Israel, would agree to extend the truce, which began two weeks ago.
A Liberia-flagged container ship was reported on Wednesday to have sustained damage to its bridge after being hit by gunfire and rocket-propelled grenades northeast of Oman.
The United Kingdom Maritime Trade Operations (UKMTO) said the master of the vessel reported being approached by an Iranian gunboat. The vessel, it said, was subsequently fired upon. All crew members were safe and there was no fire or environmental impact due to the incident.
Maritime security sources said that three people were onboard that gunboat.
The master of the Greek-operated container ship also reported that no radio contact was made prior to the incident and that the vessel had been initially informed that it had permission to transit the Strait of Hormuz.
The UKMTO later said that a second container vessel had been fired upon about eight nautical miles west of Iran. The Panama-flagged vessel was not damaged and its crew members are safe.
Maritime security sources said that a third container ship was fired upon about eight nautical miles west of Iran while transiting outbound of the Strait of Hormuz. The Liberia-flagged vessel, which was not damaged had stopped in the water. Its crew are safe, the sources said.
In Europe, Ukrainian President Volodymyr Zelenskyy said the Druzhba pipeline carrying Russian oil was ready to resume operations. Three industry sources, however, said Russia was set to stop oil exports from Kazakhstan to Germany via the pipeline from May 1.
Later on Wednesday, the U.S. Energy Information Administration is due to publish weekly inventory data. Crude stocks fell by 4.5 million barrels last week, while gasoline and distillate stocks also declined, market sources said, citing American Petroleum Institute figures.
Analysts estimated a 1.2 million-barrel draw of crude for the week ended April 17.
“If the EIA confirms the draws and U.S. weekly exports of both crude oil and refined products remain robust, this will be taken as confirmation that consumers in Europe and the Far East are scrambling to secure oil supplies wherever, whenever, and however they can,” PVM analysts said.
Shares of Deutsche Telekom slipped 1.5% on Wednesday after reports of potential merger talks between the German telecoms conglomerate and U.S.-based T-Mobile US, which would be the largest ever public merger if it goes ahead.
Details of the early-stage talks were reported by Reuters, which cited two sources familiar with the matter on Wednesday. Telekom, which already holds a majority 53% stake in T-Mobile, did not respond to a request for comment.
Bloomberg first reported the potential deal.
Any combination, which would need buy-in from Germany, which is Deutsche Telekom’s single biggest shareholder, would create the world’s biggest wireless operator by market capitalization, with operations spanning the United States and Europe.
T-Mobile’s market value is about $218 billion, while Deutsche Telekom has a valuation of about $166 billion.
While the discussions are at a preliminary stage, the proposed idea is for a new holding company that would make a stock bid for both companies, owned by existing investors, and then list in the U.S. and Europe, Bloomberg said.
The German stake is roughly split between the government and state-lender KfW, whose stake could be diluted in a merged entity.
The deal would create a giant firm with potentially greater liquidity, which could also be useful for future dealmaking, according to a person familiar with the matter, speaking on condition of anonymity because the matter is private.
T-Mobile’s stock has lost a quarter of its value in the last year, while Deutsche Telekom’s shares have lost 10%.
Inflation in the U.K. jumped to 3.3% in March from 3.0% in February, official data showed on Wednesday, driven mainly by a notable rise in energy prices following the start of U.S. and Israel’s war with Iran.
Factory gate prices also jumped and by much more than expected, the figures from the Office for National Statistics (ONS) revealed.
Economists said the increases – driven largely by fuel – were unlikely to push the Bank of England’s (BoE) Monetary Policy Committee (MPC) to raise interest rates as soon as next week’s meeting, and the key question was whether the jump in energy prices would ignite a broader inflation problem.
“Inflation will probably fall to 2.9% in April as the big hikes in regulated prices drop out of the annual comparison,” said Ruth Gregory, deputy chief U.K. economist at Capital Economics.
“But the next eight months will be an uncomfortable ride for the MPC.”
Economists polled by Reuters had mostly expected the headline consumer price inflation rate to accelerate to 3.3%, driven by a rise in petrol and other fuel costs in March.
The price of motor fuels jumped by 8.7% on the month, the biggest rise since June 2022, shortly after Russia’s full-scale invasion of Ukraine, the ONS said.
The data showed services price inflation – which the BoE watches closely as a sign of longer-term inflation pressures – rose unexpectedly to 4.5% from 4.3% in February.
But much of that increase was due to a rise in air fares driven by the timing of the Easter holidays.
Core inflation, which excludes more volatile food, energy, alcohol and tobacco prices and is also watched closely by the BoE, weakened to 3.1% from 3.2% in February.
War impact
Before the U.S.-Israeli war on Iran began on Feb. 28, the BoE said Britain’s inflation rate – the highest among the G-7 economies for much of the last four years – was likely to be close to its 2% target in April.
But last month, the BoE sharply increased its inflation forecast due to the energy price shock, predicting it would rise toward 3.5% by the middle of 2026.
The International Monetary Fund (IMF) last week predicted British inflation would peak at 4% in the coming months.
However, the BoE’s interest rate-setters have mostly said it is too soon to know what the rise in headline inflation will mean for underlying price pressures in the economy, given the weak jobs market, which could make it harder for workers to demand higher pay or for businesses to pass on higher costs.
The British central bank is expected to keep borrowing costs on hold on April 30 at the end of its next scheduled Monetary Policy Committee meeting.
Financial markets on Wednesday were betting on one or possibly two quarter-point interest rate rises by the BoE this year. But a Reuters poll of economists showed most expected no change in borrowing costs during 2026.
The ONS figures showed cost inflation reported by manufacturers, some of which will filter through into consumer prices, soared last month.
Producer input price inflation leapt in March alone by 4.4%, the second biggest monthly increase since records began in 1984, behind only the increase in March 2022 due to the energy price shock spurred by the invasion of Ukraine.
Producer prices charged by services firms rose by 3.0% in the first quarter, up from 2.8% in the fourth quarter, the highest reading since the third quarter of 2024.
Spain’s government on Tuesday approved a broad plan to tackle the country’s deepening housing crisis, a key political challenge for Prime Minister Pedro Sanchez ahead of elections next year.
Rising rental and housing costs are pricing many Spaniards out of the market, despite a recent economic boom. Incomes have failed to keep up. Analysts say tourism and population growth in cities driven by immigration have further strained supply.
The new plan, worth 7 billion euros ($8.23 billion), triples government investment in public housing over the next four years. It ensures that subsidized housing cannot be reclassified after a few years. It also includes help for young renters and home buyers.
“It is a significant step forward. For the first time in decades, there is a serious budgetary commitment,” said Raluca Budian, associate director of the Observatory for Decent Housing at the Madrid-based Esade business school.
About 40% of the money will be earmarked for growing the public housing supply, which Spain lacks compared to the European average, while 30% will be set aside for property renovations, the government said. That will include funds for making homes more energy-efficient and building in depopulated parts of the country.
The rest will go toward subsidies, with a focus on young people.
“The public is demanding an agreement to address the main problem currently affecting them,” Housing Minister Isabel Rodríguez said Tuesday. Housing routinely comes up as Spaniards’ top concern, according to state pollster CIS.
Housing costs in Spain rose nearly 13% year-on-year at the end of 2025, according EU statistics agency Eurostat.
Spain ranks near the bottom of Organization for Economic Co-operation and Development countries with public housing for rent, with under 2% of available supply. The OECD average is 7%. In France, it is is 14%, Britain 16% and the Netherlands 34%.
In the past, Spain built housing with public funds that later passed into private ownership. Once they were sold, they disappeared from the public housing stock.
Brazil does not favor either the United States or China as a trading partner, President Luiz Inacio Lula da Silva said Tuesday, underscoring the country’s balanced approach to global economic ties.
Lula said Brazil seeks to maintain strong and pragmatic relations with both Washington and Beijing, prioritizing national interests over geopolitical alignment.
“We want multilateralism,” Lula added during a joint declaration alongside Portuguese Prime Minister Luis Montenegro at Lisbon’s Belem Palace.
Last month, the Brazilian leader described China as his country’s “best partner,” as he welcomed investments by Chinese carmakers in Latin America’s largest economy.
“I am confident that the partnership with China is thriving,” Lula told an event marking the reopening of an automotive plant in Goias state, a partnership between Brazil’s CAOA and Chinese automaker Changan.
President of the Turkish Grand National Assembly Digital Channels Commission Elmas: Platforms will support the work done by the state
Borsa Istanbul accepted as recognized stock exchange by UK’s HMRC
Government ally slams Turkish main opposition’s election call
President of the Turkish Grand National Assembly Digital Channels Commission Elmas: Platforms will support the work done by the state
Borsa Istanbul accepted as recognized stock exchange by UK’s HMRC
Government ally slams Turkish main opposition’s election call
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