World Shares, US Futures Skid as Middle East Tensions Push Oil Higher

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Global stock markets and US futures fell on Tuesday after a wave of Houthi attacks on oil facilities in Saudi Arabia escalated Middle East conflict and pushed crude prices higher. The attacks targeted Saudi Arabia's southern region, renewing fighting between Washington's ally and Iranian-backed rebels in Yemen.

European and US markets open lower

Germany's DAX declined 0.3% to 25,922.44, while France's CAC 40 fell 0.2% to 8,291.43. Britain's FTSE 100 was nearly unchanged at 10,824.32.

US futures pointed to a weaker open. The S&P 500 future was down 0.2%, while the Dow Jones Industrial Average future fell 0.7%.

Asian stocks hit, yen firms

Tokyo's Nikkei 225 gave up early gains and sank 1.7% to 65,269.33. Major exporters were sold after a surge in the yen. Toyota Motor Corp. shed 4.1%, while Panasonic Holdings Corp. fell 5.8%.

The US dollar slipped to 153.86 yen from 154.34 yen. The yen has gained in recent days on expectations that US and Japanese authorities might intervene to stop further yen weakness. Last week, the dollar briefly rose to about 160 yen.

Japan's Cabinet Office revised second-quarter economic growth up to an annualised 1.4%, from an earlier estimate of 1.1%. The revision reflected stronger business investment, though overall investment still contracted at minus 0.9%, according to Norihiro Yamaguchi of Oxford Economics.

“The boost to consumption from policy measures seen in April-May is already fading, and supply-side-driven inflation will accelerate ahead as firms will pass on increased costs, deteriorating consumers' purchasing power,” Yamaguchi said.

South Korea's Kospi fell 0.6% to 6,954.52 after an early rally. Samsung Electronics handed back early gains to slip 0.2%. Hong Kong's Hang Seng lost 0.4% to 25,317.18. The Shanghai Composite index edged 0.2% higher to 3,940.55, helped by data showing Chinese exports jumped 25% year-on-year in August, driven by strong demand for autos and high-tech items.

Australia's S&P/ASX 200 declined 1% to 8,920.80.

US inflation data ahead

On Friday, the S&P 500 lost 0.4% and the Dow industrials fell 0.5%. The Nasdaq composite gave back 0.3%.

Wall Street will get key inflation updates this week. The US releases its August Producer Price Index on Thursday, which shows prices businesses pay before costs are passed to consumers.

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