27/03/2026

BIZ & FINANCE FRIDAY | MAR 27, 2026

16

Oil climbs while equities sink

Mideast war hits German consumer confidence: Survey BERLIN: German

to leverage prematurely, particularly if market stress strengthens its negotiating position. However, she added: “It would be imprudent to assume diplomacy is absent simply because it is not visible. In conflicts of this nature, public rhetoric and private negotiation often diverge materially. “Markets understand this dynamic, and they also tend to inflect before the political endgame is formally in place.” With investors holding on to hope that a deal can be struck, oil prices have stabilised this week, with Brent just above US$100 and WTI around US$90. Both contracts rallied yesterday. Stocks in Wall Street and Europe rose but Asian markets struggled after a two-day rally. Tokyo, Hong Kong, Shanghai, Seoul, Sydney, Taipei, Singapore, Manila, Bangkok and Jakarta fell along with London, Paris and Frankfurt. relinquish that

Hormuz – through which around 20% of oil and gas passes – continue to cast a dark shadows. Washington presented a 15-point plan to end the war, including Iran giving up its enriched uranium and opening up the waterway, while Tehran’s state-run TV reported officials had put forward their own five conditions for hostilities to end. Trump on Wednesday threatened to “unleash hell” if Iran did not strike a deal, but Foreign Minister Abbas Araghchi said his country does not intend to negotiate. But the US president also said Iran was taking part in peace talks and the denials were because negotiators feared being killed by their own side. “Pressure on energy prices, shipping flows and broader financial conditions remains one of the few meaningful sources of leverage (Iran) retains,” said Saxo Markets’ Charu Chanana. “There is therefore little incentive

City Index’s Fiona Cincotta said for any recovery to gain traction, “investors will want to see clearer signs of de-escalation, including the reopening of the Strait of Hormuz”. Her remarks come after the head of the International Chamber of Commerce, John Denton, warned the conflict could cause the “worst industrial crisis” in decades. “The head of the International Energy Agency has warned that the world is facing an energy crisis more severe than the oil shocks of the 1970s,” he added. “From a business perspective, we believe this could yet become the worst industrial crisis in living memory.” Meanwhile, the World Trade Organisation said disruptions to fertiliser supplies posed a double threat to global food security through scarcity and high prices, with a third of the global fertiliser supply normally transiting the Strait of Hormuz. – AFP

o Investors stay cautious amid mixed messages on US-Iran ‘talks’

energy price shock, fuel-tax cuts will be expanded to 15% from 7% on gasoline and to 25% from 10% on diesel, Koo said. A new export control on naphtha products will go into effect at midnight as disruptions have hit hard the material that fuels South Korea’s large petrochemical industry, half of which is imported through the Strait of Hormuz. The government also plans to step up monitoring of foreign capital inflows after South Korean bonds’ inclusion in the world government bond index next month, it said. – Reuters consumer sentiment fell heading into April due to the Middle East war, a survey showed yesterday, adding to the woes facing Europe’s top economy. The forward-looking indicator, published by pollsters GfK and the Nuremberg Institute for Market Decisions (NIM), fell 3.2 points to minus 28. German consumers’ current purchasing power as well as their tendency to save changed only slightly in the survey, but expectations of their future incomes plunged 12.6 points as pessimism mounts. The reading in the regular poll of about 2,000 people “indicates a noticeable deterioration in consumer confidence”, Rolf Buerkl, head of consumer climate at NIM said. “Consumers are expecting inflation to take off again and the economic recovery to be held back as a result of higher energy prices.” It was the latest gloomy economic news from Germany; morale among businesses and investors also registered sharp drops in regular surveys released this week. Oil and natural gas prices have surged since the end of last month, when the United States and Israel began attacking Iran, plunging the Middle East into turmoil. Though the European Central Bank has said it is unlikely that inflation will reach the heights seen after Russia’s full-scale invasion of Ukraine in 2022, Buerkl said hostilities were nevertheless weighing on consumers. “In a recent NIM study, 60% of Germans say they expect prices for oil, gas and petrol to remain high in the long term,“ he said. “That naturally weighs on consumer confidence.” Germany’s economy has barely grown since 2022, hit by subdued global demand and increasingly fierce Chinese competition in key export industries like cars and chemicals. German Chancellor Friedrich Merz has said reviving the economy is one of his top priorities but economists fear the Iran war is set to stall the rebound once again. – AFP

HONG KONG: Oil prices jumped and equities fell yesterday as investors tracked developments in the Middle East amid hopes that US and Iranian officials will bring an end to a conflict that has ramped up fears of an unprecedented global energy crisis. Markets have been buoyed since late Monday after Donald Trump backed down on a threat to destroy Iran‘s energy infrastructure and said the two sides were in peace talks. But while crude prices are down from last week and the mood on trading floors has been better than most of March, uncertainty and the virtual closure of the Strait of

Storage tanks and oil refineries in Jurong Island, Singapore. – R EUTE R S PIC

South Korea to carry out bond buyback, raise fuel price cap SEOUL: South Korea yesterday said it will carry out a 5 trillion won (RM13.3 billion) emergency bond buyback and expand fuel tax cuts starting today to protect the economy from a global market rout triggered by the US-Israeli war on Iran. at midnight, and an expansion of fuel tax breaks to prevent local retailers from passing on the effects of sudden international oil spikes to consumers. After the announcement was made, three-year notes rebounded. Yesterday’s measures are the latest policy responses from Asia’s The operating rate for nuclear power plants will be raised to above 80% and the seasonal cap on coal power plants will be scrapped, Finance Minister Koo Yun-cheol said. “As the Middle East war that began in late February enters its fourth week, the economic impact such as higher prices, supply disruptions and heightened volatility in the foreign and financial markets are increasingly evident.” meeting to discuss a response to what he said was an “unpredictable situation” that together with a complex global supply chain made remedies difficult to formulate.

South Korea faces a particular vulnerability due to its heavy reliance on energy imports passing through the Strait of Hormuz, which has been effectively closed since early March. It is set to unveil a new cap on fuel prices two weeks after introducing the ceiling to rein in pump prices, which was initially based on supplies and global oil prices before the conflict broke out. In order to further cushion the

The bond buyback will be conducted in two tranches, 2.5 trillion won on March 27 and another 2.5 trillion won on April 1, to add liquidity to the local bond market and cap rising yields after three-year treasury bond yields surged to the highest point since mid-2024. The move was paired with an increased price cap on fuel, effective

fourth-largest economy to cushion the fallout from the US-Israeli war on Iran, which sparked a sharp bond selloff. Consumers and bond market participants have been hit hard due to the country’s heavy reliance on imported oil, with markets now penciling in more than 100 basis points of interest rate hikes over the next 12 months.

The government is prepared to use available resources to deal with “a grave situation” and could take additional action, he said. South Korean President Lee Jae Myung held a high-level economic