The growing likelihood of Western military action against Syria pummeled Asian stock markets Wednesday and sent the price of oil soaring. India’s rupee, already under pressure from the country’s deteriorating economic and financial situation, fell dramatically.
Fears that the U.S., Britain and other countries are gearing up to confront Syria over its alleged use of chemical weapons against civilians rose after Defense Secretary Chuck Hagel said the U.S. military stands ready to strike against Syria if President Barack Obama gives the order.
“Investors are sort of battening down the hatches a bit. I get the sense that this looks like a situation that is likely to be with us for a while,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “One reason the market has started to fall is that people are thinking this may not be a one-off blip that will only last a week. The stakes have been raised by the use of chemical weapons,” he said.
Gold prices and U.S. government bond prices advanced because traders see those investments holding their value better in times of uncertainty. Assets considered risky even in normal circumstances went into a tailspin. India’s rupee reached a new low against the U.S. dollar. One dollar now buys about 68.4 rupees compared with 66.2 rupees only a day earlier. The stock benchmark in the Philippines shed 4.6 percent.
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