If the account from Iran's state television holds up, Thursday would be the heaviest single day of vessel damage in the Strait of Hormuz since the war with Iran began on February 28. That comparison, carried by WRAL from Associated Press copy, is why a shipping report pulled crude, equity futures and Asian chip stocks in the same direction before European trading was an hour old.
The report has not been independently verified. None of the coverage I went through names the seven vessels, their owners, their cargo or any casualties.
Key numbers
- $112.27 Brent crude on Thursday, 3.2% higher and at the top of the $97 to $112 band it has traded in over recent days
- $99.80 the U.S. benchmark grade, up 2.8% in the same session
- 7 tankers described as on fire and damaged in the Iranian state television report
- 2.7% the fall in Tokyo's Nikkei 225, which closed at 62,907.84
Crude moved first, equities followed
Oil was the first market to react, with both benchmarks up more than 2%. Stock markets then gave ground in the opposite direction.
In early European dealing, Germany's DAX was 1.1% lower at 25,367.96 and France's CAC 40 fell 1.3% to 7,816.67. London's FTSE 100 lost 0.7% to 10,678.67. Futures pointed the same way, with the S&P 500 contract down 1% and the Dow Jones Industrial Average contract off 0.7%.
In plain words: the Strait of Hormuz is the narrow sea passage that tankers use to carry crude out of the Gulf. When ships are damaged there, buyers worry that fewer cargoes will get through, so they pay more for the barrels already on the water. Higher fuel costs then weigh on companies that burn it or ship with it, which is how one shipping report reaches share prices.
Chip stocks led the selling in Asia
The Nikkei 225's 2.7% decline came with heavy selling in large technology names: SoftBank Group dropped 6.9%, equipment maker Tokyo Electron 7% and testing specialist Advantest 6%.
South Korea fell further. The Kospi lost 3.5% to 5,533.77, with Samsung Electronics down 4% and SK Hynix down 5.5%. Hong Kong's Hang Seng shed 3% to 22,934.68 and the Shanghai Composite 1.5% to 3,658.03. Taiwan's Taiex lost 1.8%, and Australia's S&P/ASX 200 held up best with a 0.4% slip to 8,793.20.
The AP report ties part of that pressure to a separate worry: that data center construction could slow because borrowing money has become more expensive.
Wednesday on Wall Street had gone the other way
The retreat reversed a solid U.S. session. On Wednesday the S&P 500 added 0.6%, the Dow 0.7% and the Nasdaq composite 1.1%, helped by company results.
SpaceX rose 7.8% after reporting stronger summer profit than analysts had expected, and Elon Musk said the company had taken a step toward considering a merger with Tesla, which gained 3.4%. Capital One Financial added 2.5% and Winnebago Industries 10.7%. Netflix was the exception, down 5.3% despite profit above expectations, as investors focused on signs its momentum was easing.
Currencies moved less. The dollar eased to 157.22 Japanese yen from 158.14 late Wednesday, and the euro slipped to $1.1231 from $1.1233.