Global markets diverge after Syria strike

LONDON: Asian and European equities diverged Monday in a muted reaction to US-led strikes on Syria, dealers said.

In late morning European deals, Frankfurt forged 0.2 percent higher and Paris turned flat, while London slid 0.3 percent on the rising pound and the faltering energy sector.

The United States, Britain and France carried out attacks at the weekend on alleged chemical weapons facilities, in response to what they say was a toxic gas attack by the Russia-backed Assad regime a week before.

"Even though investors have moved past the Syria missile strikes and are working on the basis that there will be no extended conflict or market-adverse retaliation, equity markets are struggling for direction," noted Interactive Investor analyst Rebecca O'Keeffe.

"This lack of positive reaction is a potential concern and is an indication that investors are wary."

- Wary investors -

Most Asian markets dipped Monday but Tokyo eked out gains, as a US-led strike on Syrian targets fuelled fresh concerns over the tinderbox Middle East.

London's benchmark FTSE 100 index lost ground as the strong pound weighed on the share prices of multinationals earning large amounts in other currencies.

The commodities-heavy FTSE was also weighed down as oil prices slid, dragging the energy sector lower with BP down 1.6 percent at 495.90 pence.

"The strike on Syrian chemical locations over the weekend marks the end of the recent standoff," noted IG analyst Joshua Mahony.

"Market realisation that this attack largely draws the line under the issue has brought about a sharp decline in oil prices in early trade, hitting BP shares in particular."

The troubles in the oil-rich Middle East have helped push the price of crude to highs not seen since the end of 2014, though the market dropped on Monday.

While there was broad support for the Syria mission, Moscow condemned it as illegal and warned it would provoke "chaos" in international relations.

The Syria crisis, which has seen the West's relationship with Russia grow increasingly frosty, has encompassed other regional players including Iran, Saudi Arabia and Israel, and led to talk of a military standoff.

It also comes against the backdrop of a trade dispute between the United States and China. Many fear this could hammer the global economy if the two sides push through tit-for-tat tariffs on billions of dollars' worth of goods.