The intensification of mutual attacks between parties in the Middle East is causing the downward trend on the stock markets to continue. US President Donald Trump announced that the US blockade in the Strait of Hormuz had been reinstated and a 20 percent toll would be charged to all ships passing through the strait.
The headquarters of Khatam al-Anbiya, the unit of the Iranian armed forces waging the war, also said: “We will not allow the US to intervene in the Strait of Hormuz.” He made a statement. Ismail Bekayi, spokesman for Iran's Foreign Ministry and Negotiating Committee, said the agreement had entered a crisis phase.
On the other hand, the Ministry of Defense of the United Arab Emirates (UAE) announced that two tankers belonging to the country were attacked by Iranian cruise missiles in the southern corridor of the Strait of Hormuz, one crew member died and 8 personnel were injured.
Conflicting statements about the Strait of Hormuz are causing investors to turn away from risky investments. After attacks in Bahrain, Kuwait, Qatar, Jordan and Oman over the weekend, the two countries claimed control over the Strait of Hormuz, threatening the diplomatic process between the parties.
Renewed attacks raise concerns about whether a long-term ceasefire is possible.
As tensions between the US and Iran drive oil prices higher, concerns that conflicts over the Strait of Hormuz could disrupt energy supplies and increase inflationary pressures are increasing risk perceptions in markets.
Fears that the rise of artificial intelligence stocks has gone too far continue to dominate markets. The ongoing volatility in the semiconductor market is making it difficult for the technology sector to maintain consistent upward momentum.
On the other hand, the inflation data announced today in the USA is the focus of the markets.
After the drop in oil prices last month, the CPI in the US is not expected to change on a monthly basis. This data will be closely monitored with a view to shaping interest rate expectations from the US Federal Reserve (Fed).
On the other hand, Fed board member Christopher Waller said in his speech to the New York Business Economics Association that monetary policy tightening may be necessary if core inflation data returns high this week.
The Fed President's first presentation of the monetary policy report to Congress is the focus of the markets today.
In addition, it is assumed that volatility in the markets will remain high as the reporting period begins and, depending on the company's announced results, share-based separations may come to the fore. The balance sheets of major US banks such as Bank of America, Wells Fargo, Citigroup, Goldman Sachs and JPMorgan, whose publication begins this week, are also on investors' agendas.
On the other hand, the US Treasury Department released the fiscal balance report for June. Accordingly, the US federal government recorded a budget deficit of $120 billion in June, less than expected.
The barrel price of Brent oil, which exceeded $85 for the first time since June 12 due to supply concerns exacerbated by the intensification of US attacks on Iran and supply problems due to the Strait of Hormuz, rose 1.6 percent compared to yesterday's closing price to reach $84.2.
As the barrel price of Brent oil exceeds $85, the Fed's tightening pricing policy to raise interest rates is putting pressure on stock markets.
Analysts said renewed U.S. military strikes against Iran had heightened concerns about disruptions to global crude supplies, revived inflation worries and increased uncertainty about the outlook for global interest rates.
The US 10-year bond interest rate, which rose 7 basis points to 4.63 percent yesterday due to rising inflation concerns due to oil prices, remains horizontally at 4.63 percent today.
The dollar index fell 0.1 percent to 101.2. An ounce of gold, which lost 2.6 percent of its value yesterday and recorded its biggest daily decline since June 24, is trading at $4,021 in the new day, up 0.5 percent, as the said decline offers investors a buying opportunity.
The New York stock market remained negative
A negative trend was observed on the New York Stock Exchange yesterday due to the renewed escalation of tensions between the US and Iran and increasing selling pressure on technology stocks. The sell-off in semiconductor stocks also put pressure on the markets. Shares of chipmaker Micron Technology lost 4.3 percent, Sandisk shares lost 12.6 percent, Advanced Micro Devices (AMD) shares lost 4.2 percent and Intel shares lost 6.1 percent.
With these developments, the Dow Jones index fell by 0.26 percent, the S&P 500 index fell by 0.79 percent and the Nasdaq index lost 1.55 percent.
Index futures contracts in the US started the day with a mixed trend.
The European stock markets were mostly buying
Despite increasing geopolitical tensions, European stock markets followed a buying trend.
The strong performance of telecommunications stocks helped offset losses on European stock markets. Due to the rise in oil prices, stocks of energy companies also rose. However, declines in technology stocks limited optimism on European stock markets.
There is selling pressure in the bond markets in Europe. The UK two-year bond rate rose 13 basis points to 4.34 percent yesterday. Based on money market pricing, it is estimated that the Bank of England (BoE) could raise interest rates by the end of the year.
On the other hand, it was reported that European Union (EU) countries imported a record amount of LNG at 9.9 million tons from Yamal LNG, Russia's largest liquefied natural gas (LNG) production facility, in the first half of this year.
The EU has decided to impose sanctions on Russian intelligence officials, hackers and related companies that carry out cyber espionage and sabotage activities against European countries.
EU countries have adopted the regulation, which protects passengers' right to compensation for delays and cancellations and brings new guarantees.
The FTSE 100 index in England increased by 0.01 percent, the CAC 40 index in France by 0.31 percent, the DAX 40 index in Germany by 0.19 percent and the FTSE MIB 30 index in Italy by 0.37 percent. Index futures contracts in Europe started the day with a mixed trend.
Asian stock markets remain negative
These developments also increased selling pressure in Asian markets. In terms of macroeconomic data, China's exports rose 27 percent in June, exceeding expectations and achieving a significant acceleration compared to the previous month. Exports in the country rose by 19.4 percent in May.
On the other hand, the Central Bank of South Korea is expected to raise the key interest rate at its interest rate decision meeting on Thursday due to increasing inflationary pressures. Inflation in the country reached 3.2 percent in June, its highest level in 2.5 years. Inflation in the country has been above the South Korean central bank's inflation target of 2 percent for four months.
While industrial production in Japan rose 0.1 percent below expectations on a monthly basis in May, it fell by 2.1 percent on an annual basis and was therefore above expectations.
With these developments, the Nikkei 225 index in Japan fell by 0.1 percent, the Kospi index in South Korea fell by 0.4 percent, the Shanghai Composite index in China fell by 0.7 percent and the Hang Seng index in Hong Kong fell by 0.5 percent shortly before the close of trading.
In South Korea, the Kospi index reached 6,448 points, its lowest level since April 24th.
The stock market ended the day with a decline
Borsa Istanbul's BIST 100 index, which followed a sell-oriented trend yesterday, ended the day at 14,092.02 points, losing 1.60 percent of its value.
The August futures contract based on the BIST 30 index in the Borsa Istanbul Futures and Options Market (VIOP) fell by 0.5 percent in the last evening session compared to the normal close of the session. While the Dollar/TL ended the day yesterday at 47.0160 with a rise of 0.1 percent, today it is trading at the opening of the interbank market at 47.0320, just above the previous close.
Analysts said that the data agenda will remain quiet in the country today and that the news flow on developments in the Middle East, particularly inflation data in the US, will be followed abroad. Technically, 14,100 and 14,250 points in the BIST 100 index are in a resistance position and 14,000 and 13,900 points are in a support position.
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