HONG KONG, CHINA — Asian equities retreated and oil prices rallied Wednesday on fears that the Israel-Hamas conflict could spill over into a regional war after a strike on a Gaza hospital dealt a blow to President Joe Biden’s diplomatic drive.
Markets had enjoyed a healthy run Tuesday on optimism that while Israeli Prime Minister Benjamin Netanyahu was preparing for a ground offensive in the territory, the crisis could be contained.
The Hamas-run Palestinian territory’s health ministry blamed Israel for the hospital blast, but Tel Aviv said it was caused by a rocket misfired by Hamas ally Islamic Jihad.
Biden had planned to visit Israel and Jordan on Wednesday to talk to Netanyahu as well as Jordanian King Abdullah II, Palestinian leader Mahmud Abbas and Egyptian President Abdel Fattah al-Sisi in hopes of finding a way to de-escalate.
But news that at least 200 had been killed in the hospital blast saw the Arab leaders cancel their summit in Amman and fanned concerns of a wider conflagration, with Iran warning this week that a wider war was becoming “inevitable”.
There was an increase in fighting between Israeli troops and Tehran-backed Hezbollah on the Lebanon border.
“The whole region is at the brink of falling into the abyss that this new cycle of death and destruction is pushing us towards,” King Abdullah II said following talks with German Chancellor Olaf Scholz in Berlin on Tuesday.
“The threat of this war expanding is real.”
Asian markets mostly fell, with Tokyo, Hong Kong, Shanghai, Singapore, Wellington, Taipei and Manila all down.
Sydney, Seoul and Jakarta edged up.
Crude jumped more than two percent on worries about supplies from the oil-rich region in the event of a wider war, with some observers even warning the commodity could head towards $150 a barrel.
Forecast-busting economic growth data out of China provided a shaft of light for traders.
The 4.9 percent third-quarter expansion was slower than the previous three months but much better than analyst estimates, lifting hopes that the world’s number-two economy was seeing some stabilisation after a torrid year.
The figures were helped by a healthy jump in retail sales, suggesting the country’s consumers are regaining a little more confidence, though officials continue to face calls for more stimulus to kickstart the economy.
However, a report showing a better-than-expected rise in US retail sales revived talk of another interest rate hike by the Federal Reserve, even after a string of decision-makers lined up in recent weeks to suggest monetary policy was likely tight enough to bring inflation down.
“Good news about the economy is once again bad news, since it will keep policymakers on the fence on delivering more tightening,” said Edward Moya at OANDA.
“It seems the US economy isn’t ready to head into a recession just yet.”
And SPI Asset Management’s Stephen Innes added: “Simply put, the US consumer appears unbowed and utterly unaffected by rising interest rates.
“Contrary to expectations that the US consumer is weakening, recent revisions suggest Americans may still have significant savings.
“The steady stream of strong macro data reinforces the view that economic growth in the US remains robust enough to avoid a recession — a view that is admittedly increasingly part of a growing consensus.”
Carousell halts sale of Taylor Swift concert tickets to combat scams
MHA: Singaporean influencers issued advisories over Gaza conflict content
Samlit executives investigated for suspected fraudulent business operations
Singapore Airshow faces criticism over recurring traffic and transportation issues
1M65 founder est. S$100k loss in interest from CPF Special Account closure for aged 55+
Singapore authorities heighten vigilance as Zika signals persist in Boon Lay Place
SDP Chief Dr Chee mulls legal challenge against govt’s stance amid POFMA spree
SSG and NEA defend ‘washroom cleaning’ course on SkillsFuture amid online bewilderment
SAESL’s US$180M investment to bring 500 job opportunities in new aerospace facilities
UOB junior staff to get a one-off extra month’s bonus to cope with rising living costs
Love Aid Singapore raises nearly S$750,000 for Gaza aid initiative
DPM Wong defends SA closure for 55+, netizens demand autonomy for their own CPF savings
Singapore2 weeks ago
PM Lee encourages more births in the year of the dragon amid declining fertility rates
Singapore2 weeks ago
Singapore surpasses nursing recruitment target in 2023 amidst high attrition rates
Featured1 week ago
PA surveys community & govt confidence amid pending general election
Comments1 week ago
PAP Marcus Loh accuses WP’s MP of alleged dishonesty on debate about reserves
Civil Society1 week ago
Singaporeans stand firm in support for Palestine amidst police scrutiny
Civil Society7 days ago
At least 9 individuals summoned by police over Palestine solidarity activities on 2 Feb
Community1 week ago
Connectivity struggles in Tengah town prompt online user discussion
International1 week ago
Singapore Police investigate two events amid Israel’s genocide in Gaza