Stocks stable, oil drops after US-led air strikes on Syria

Global stock markets were stable and the price of oil fell Monday as investors seemed convinced that U.S.-led air strikes on Syria would not escalate but remained cautious about tensions with Russia.

KEEPING SCORE: Germany's DAX was flat at 12,440, while the CAC 40 in France was down 0.1 per cent at 5,309. The FTSE 100 in Britain dropped 0.4 per cent to 7,230. Futures for the S&P 500 and Dow Jones industrial average climbed 0.6 per cent, pointing to early gains on Wall Street.

ASIA'S DAY: Japan's Nikkei 225 index rose 0.3 per cent to 21,835.53, but Hong Kong's Hang Seng dropped 1.6 per cent to 30,315.59 and the Shanghai Composite index sank 1.5 per cent to 3,110.65. South Korea's Kospi edged 0.1 per cent higher to 2,457.49 and Australia's S&P ASX 200 picked up 0.2 per cent to 5,841.30. Shares fell in Taiwan and Singapore and rose in Indonesia.

MIDDLE EAST: The leaders of Russia, Iran and the Hezbollah group in Lebanon said Sunday that Western airstrikes on their ally Syria, targeting its chemical weapons program, have complicated prospects for a political settlement to the country's seven-year conflict. Meanwhile, President Donald Trump on Sunday defended his use of the phrase "Mission Accomplished" to describe the U.S.-led missile attack, while his aides stressed continuing U.S. troop involvement and plans for new economic sanctions against Russia for enabling the government of Bashar Assad.

ANALYST VIEWPOINT: "The markets are taking the surgical strike at the heart of Syria's chemical weapon program in stride as traders had priced in this outcome with a high degree of probability," Stephen Innes of OANDA said in a commentary. He added: "With trade war and now Syria fatigue likely to set in, however, it's best not to get too comfortable at this point as market risk sentiment swings will remain large this week."

ENERGY: Oil prices fell back from spikes last week on fears over an escalation of strife in the Middle East, with U.S. benchmark crude falling 72 cents to $66.67 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, which is used to price international oils, fell 81 cents to $71.77 per barrel.

CHINA TRADE: The Trump administration on Friday targeted China and five other countries including allies Japan and South Korea for special monitoring for what the administration says are practices that are worsening America's trade deficit. But the impact on financial markets in Asia was limited as it comes at a time of even harsher threats of U.S. penalty tariffs on China and other nations. The U.S. government is also expected to announce new sanctions against Russia over its involvement in Syria.

CHINA ECONOMY: Chinese shares declined ahead of the release of economic growth data that are expected to show the economy overshooting the official target to sustain a 6.8 per cent annual pace in the first quarter of the year. Good news could lead regulators to tighten monetary policy, hurting share prices. Tuesday's report of monthly figures for March, the first since the lunar new year holidays, will provide fresh insights into conditions across the world's No. 2 economy.

WPP: Shares in WPP, the world's largest ad agency, fell as much as 5.6 per cent on Monday after its CEO, Martin Sorrell, resigned over an investigation into personal misconduct. Analysts say his departure could leave the company he founded three decades ago rudderless, but could also see parts sold off for higher value.

CURRENCY: The dollar was trading at 107.23 yen, down from 107.36 yen late Friday. The euro edged higher, to $1.2364 from $1.2333.


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