While concerns that the conflict in the Middle East could hit global trade and increase inflationary pressures renewed global risk perceptions, energy concerns intensified after the Strait of Hormuz was closed to passage.
US President Donald Trump announced yesterday that he has ordered the provision of political risk insurance and guarantee at a very reasonable price for the financial security of all maritime trade through the Gulf, particularly in the energy sector, and that the US Navy will begin escorting tankers through the Strait of Hormuz if necessary.
While Trump emphasized that the US will ensure the free flow of energy no matter what, he explained that US economic and military power is the greatest in the world and that further steps will follow.
Analysts said there were concerns that the rise in energy prices could stoke inflation and further complicate policy decisions by the Federal Reserve, which is already cautious about price increases due to tariffs.
Trump's tough reaction to Spain
On the other hand, Trump reacted sharply to Spain, which did not allow the US to use its bases, giving the message that they could break off commercial and economic relations with that country.
Arguing that European countries should provide greater support to the United States and Israel in the Iran process, Trump criticized both England and Spain with harsh words on this issue.
Referring to Britain's process of leasing the island of Diego Garcia, where the US base is located, for a hundred years, he said: “England is also far from cooperating. Britain's attitude is shocking, but we are not living in the Churchill era.” he said.
Sharp statements from Fed officials
In addition to the intensive agenda on the conflicts in the Middle East, the statements of Fed representatives were also closely followed. Neel Kashkari, president of the Minneapolis Fed, said it was too early to tell what impact the conflict in the Middle East would have on inflation.
Explaining that he believes monetary policy is in a very good position, Kashkari said: “We have to wait and see how long the impact of this new shock that may hit the global economy will last and how large it will be.” he said.
New York Fed President John Williams said further rate cuts would be needed if inflation slowed. Kansas City Fed President Jeff Schmid said inflation has been above the bank's target for nearly five years and that there is no reason for complacency.
On the macroeconomic side, investors will focus on February's ADP private sector employment data and the Fed's Beige Book report due today.
Oil prices continued their rise on the 5th trading day
With these developments, the Dow Jones index fell by 0.83 percent yesterday, the Nasdaq index by 1.02 percent and the S&P 500 index by 0.94 percent. Index futures contracts in the USA started the new day negatively.
The oil price increase was postponed to the 5th trading day due to the conflicts in the Middle East and the closure of the Strait of Hormuz. Brent oil hit $84.3 yesterday, its highest level since July 2024.
Although the rise in oil prices slowed following Trump's comments on the Strait of Hormuz, the barrel price of Brent oil closed at $80.4 yesterday, up 2.8 percent. Brent oil, which continues its rise in the new trading day, is currently trading at $82.1, up 2.1 percent.
While a selling trend prevailed in the US bond markets yesterday, the interest rate on 10-year US bonds is at 4.07 percent on the new day.
While the dollar index closed yesterday at 99.1 with an increase of 0.7 percent, it is following a horizontal course on the new day.
While the gold ounce price closed yesterday at $5,000 96 with a decline of 4.4 percent due to the rise in the dollar index, profit realization and high volatility in the markets, it is trading at $ 5,000 156 with a gain of 1.2 percent in the new trading day.
European stock markets were negative
While European stock markets followed a negative trend yesterday due to the possibility of an extension of the conflict in the Middle East and the impact of rising energy prices, index futures contracts in the region started the new day with a sell weight.
Banking sector stocks in the Stoxx Europe 600 index lost 4.3 percent of their value yesterday and insurance sector stocks lost 3.6 percent. Shares in the travel and entertainment sector fell 2 percent due to the impact of widespread cancellations due to airspace closures in the Middle East.
As tensions in the Middle East continue to be the focus of the region, the heads of state and government of the European Union (EU) institutions held a meeting on the impact of developments in the Middle East on energy prices and the economic situation.
EU Council President Antonio Costa, EU Commission President Ursula von der Leyen, European Central Bank (ECB) President Christine Lagarde and Eurogroup President Kiryakos Pierrakakis attended the meeting in Brussels yesterday.
On the other hand, Spanish markets saw sharp declines after Trump declared that sanctions would be imposed after Spain did not allow the US to use its military bases. In Spain, the IBEX 35 index closed the day down 4.6 percent.
Deputy Prime Minister and Minister of Labor and Social Economy Yolanda Diaz, who belongs to the Sumar Alliance, the junior partner of the coalition government in Spain, said in a statement: “Spain will not accept blackmail or attempts to teach an aggressive country a lesson. We are a country of peace. If the US wants an ally, it must first respect our sovereignty and international law.” he said.
With these developments, the FTSE 100 index in England fell by 2.75 percent, the FTSE MIB 30 index in Italy fell by 3.92 percent, the CAC 40 index in France fell by 3.46 percent and the DAX 40 index in Germany fell by 3.44 percent.
Losses are mounting in Asian markets
On the Asian side, selling pressure is intensifying due to ongoing conflicts in the Middle East and concerns about energy supplies.
The fact that a large proportion of regional countries' oil and liquefied natural gas (LNG) imports flow through the closed Strait of Hormuz raises many questions regarding the costs of processing industries and future production levels.
Given the increasing risks to energy supply across Asia and the impact of rising energy costs, the increasing seller trend, led by industrial, commercial and transport companies, is notable. South Korea's Kospi index is among the hardest-hit markets in the region, falling more than 10 percent during the day.
While these developments are also the focus of economic authorities, South Korea's Ministry of Economy and Finance yesterday held an emergency meeting with the participation of relevant ministries to assess the impact of developments in Iran on the country and determine the roadmap to be followed.
The ministry's statement said that the country has sufficient oil reserves to prevent the scenario of prolonging the crisis in the Middle East. The statement noted that the government will work to provide additional oil supplies from regions outside the Middle East in response to the closure of the Strait of Hormuz.
While macroeconomic data announced in the region will also be closely monitored, China's manufacturing purchasing managers' index (PMI) data for February came in below expectations at 49. In Japan, February services PMI data at 53.8 suggested the sector was expanding.
With these developments, the Nikkei 225 index in Japan fell by 4 percent, the Kospi index in South Korea fell by 10.2 percent, the Hang Seng index in Hong Kong fell by 3.1 percent and the Shanghai Composite Index in China fell by 1.4 percent shortly before the close of trading.
The stock market ended the day with a decline
Yesterday, Borsa Istanbul's BIST 100 index, which moved in parallel with risk perception in global markets, ended the day at 12,933.40 points, losing 3.09 percent of its value.
The April futures contract based on the BIST 30 index in the Borsa Istanbul Futures and Options Market (VIOP) was traded at 15,164.00 points in the evening session, up 0.74 percent compared to the normal session close.
While Dollar/TL closed at 43.9590 yesterday, it is trading at 43.9910 at the opening of the interbank market today, 0.1 percent above the previous close.
Analysts said an intensive data agenda will be followed today, particularly the real effective exchange rate index and monthly price development report in the country, producer inflation in the Eurozone abroad, ADP private sector employment in the US and the Fed's Beige Book report.
Analysts said geopolitical developments and news flow from the Middle East had an impact on the direction of the index, noting that 12,900 and 12,800 points in the BIST 100 index technically represent support and 13,000 and 13,100 points represent resistance.
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