Turmoil in Middle East and Japan keeps markets on edge
Published 17/03/2011 | 05:00
EUROPEAN and US shares slid for a third day yesterday as Japan's nuclear crisis worsened, political turmoil in the Middle East continued and eurozone borrowing costs rose.
Oil prices jumped due to the escalating violence in Bahrain and worries about oil supply from the region but retreated later on fears Japan's nuclear crisis was spinning out of control, which could reduce demand for oil in the short-term. Brent crude spiked after the European Union Energy Commissioner commented on the situation in Japan.
"In the coming hours there could be further catastrophic events, which could pose a threat to the lives of people on the island," Guenther Oettinger told the European Parliament.
In Bahrain, the stock exchange was closed and the cost of insuring against default by the Persian Gulf nation held near the highest since July 2009 as clashes between security forces and anti-government protesters intensified.
"From a market fear standpoint, the Bahrain situation really boils down to how Iran will react if the military starts coming down very hard on the protesters," said Akram Annous, strategist at Al Mal Capital PSC in Dubai.