European markets on edge over US attacks on Syria
April 07 2017 09:09 PM
Pedestrians walk in front of the London Stock Exchange Group headquarters. The FTSE 100 closed 0.6% up at 7,349.37 points yesterday.


Global stocks markets were mostly lower yesterday, as investors sought out safe havens such as gold and the yen after US missile strikes on Syria fanned geopolitical concerns.
Wall Street also eased on disappointing US monthly jobs data and markets watched the second day of summit talks between Chinese President Xi Jinping and his US counterpart Donald Trump.
“News of last night’s attack sent shockwaves through the markets, with investors flocking to safety, causing gains in the likes of gold and the yen,” said Joshua Mahony, market analyst at IG trading group.
“A big surge in crude prices overnight were caused primarily by the prospects of an increasing US military involvement in the Middle East.”
FXTM analyst Lukman Otunuga agreed.
“A strong sense of unease infiltrated the financial markets, with investors staying clear of riskier assets,” he said.
“The possible threat of geopolitical tensions heightening from the airstrikes has created a risk-off trading atmosphere. It must be kept in mind that participants were already jittery ahead of the Trump-Xi summit and this fresh development may compound to the horrible cocktail of uncertainty,” Otunuga said.
Trump ordered an assault on an airfield in retaliation for a chemical attack in Syria that Washington blamed on President Bashar al-Assad.
The attack came just hours after Russia warned that there could be “negative consequences” if the US took military action against Syria, which it is backing in a civil war.
The US-China summit is meanwhile taking place after months of accusations by the US tycoon that Beijing was killing US jobs and manipulating its currency.
On trading floors yesterday, gold hit a near five-month high at $1,273.30 an ounce. “Demand for safe havens has... pushed bonds, precious metals and both the yen and Swiss franc higher”, said Accendo Markets analyst Mike van Dulken.
The euro dropped to ¥117.32 in Asian trading hours, the lowest level for more than four months.
Oil prices reached one-month highs as the attacks led to concerns about supplies in the Middle East.
That helped shares in energy firms rise around the world and pushed London’s commodities-heavy FTSE 100 index into positive territory.
Weighing on the benchmark index were weaker-than-expected UK industrial production data that sparked concerns about weak growth overall for Britain’s economy as it embarks on EU-exit negotiations.
The FTSE 100 was 0.6% up at 7,349.37 points, Frankfurt’s DAX 30 was 0.1% down at 12,225.06 points, Paris’ CAC 40 was 0.3% up at 5,135.28 points, while the EURO STOXX 50 was 0.2% up at 3,495.80 points at close.

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