Hong Kong (CNN Business) — Stocks slumped on Monday as oil prices soared to the highest level in 13 years, raising fears that a new spike in inflation might hurt the global economy.
In Asia, Hong Kong’s Hang Seng Index (HSI) sank as much as 5% in morning trading. The latest drop was 3.4%, on track for its worst daily drop in seven months. Japan’s Nikkei 225 (N225) fell 3.6%. South Korea’s Kospi (KOSPI) fell 2.5%. The Shanghai Composite of China (SHCOMP) lost 1%.
In the US market, Dow Jones futures fell 450 points or 1.3%. S&P 500 and Nasdaq futures were down 1.6% and 2% respectively.
The latest turbulence came as US crude futures rose more than 7% to trade at $124.17 a barrel, the highest level since August 2008. Brent crude also rose to the highest level since 2008. , up 8% to $127.66 a barrel.
Oil prices soared further following US Secretary of State Antony Blinken said in an interview with CNN on Sunday that the United States is working with its allies in Europe to study the possibility of banning imports. of Russian oil in an effort to further punish the country for the invasion of Ukraine.
“In the event that it is implemented [la prohibición]the move will further exacerbate the imbalance between supply and demand in an already tight oil market,” wrote Yeap Jun Rong, market strategist at IG Group.
“High oil prices may pose a threat to business margins and consumer spending prospects, at a time when the Fed will face increased pressure to overcorrect with faster rate hikes and more large in light of inflationary pressures,” he added.
Delays in concluding the Iranian nuclear talks added to investor concerns regarding supply disruptions, Yeap said.
