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Global equities tumble

Growing fears of a US-led military strike against Syria continued to weigh on stocks Wednesday and at one point sent the price of oil soaring to its highest level since May 2011. However, the mood in financial markets appeared to stabilise as the day wore on.

Concerns of an attack have swelled this week following claims that President Bashar Assad’s government was responsible for a chemical attack on civilians outside Damascus on August 21. Assad denies the allegations.

“Intervention in Syria could well turn out to be a ‘Pandora’s box’, with ramifications which are difficult to envisage at this stage,” said Chris Beauchamp, market analyst at IG.

Investors have responded to the prospect of a military strike and uncertainty in the Middle East by punishing supposedly risky assets such as stocks in favor of traditional safer investments like gold.

“Tuesday’s risk-off tone remains in evidence but to a lesser degree although uncertainty remains the order of the day,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.

In Europe, most stock markets closed lower on rising tensions over Syria, with London shedding 0.17 per cent to 6,430.06 points. Frankfurt’s DAX 30 fell 1.03 per cent to 8,157.90 points and the CAC 40 in Paris slid 0.21 per cent to 3,960.46 points, while Milan finished 0.98 per cent higher at 16,743 points.

The Istanbul stock market edged down by 0.10 per cent, having dropped by 4.73 per cent on Tuesday. In the US, stocks steadied after Tuesday’s broad sell-off. The Dow Jones industrial average was up 0.1 per cent at 14,792 while the broader S&P 500 index rose the same rate to 1,632.

The dollar was a tad stronger Wednesday and clawed back some recent ground. The euro was 0.6 percent lower at $1.3314 and the dollar rose 0.6 percent to 97.65 yen.

The prospect of a strike on Syria has been felt far and wide across financial markets as investors searched out safer places for their money. Elsewhere in Asia, Japan’s Nikkei 225 index sank 1.5 per cent to close at 13,338.46, its lowest finish in two months, while Hong Kong’s Hang Seng dropped 1.6 per cent to 21,524.65. Australia’s S&P/ASX 200 slid 1.1 per cent to 5,087.20 points.

Pak stocks fall, rupee weakens

Pakistan’s main stock exchange closed lower on Wednesday, with the benchmark 100-share index of the Karachi Stock Exchange falling 1.28 per cent, or 287.38 points, to 22,236.33 points.

The local bourse fell by another one per cent amid a decline in international equity and currency markets due to the ongoing Syrian crisis. Index heavy-weights Muslim Commercial Bank Ltd and Pakistan State Oil Co Ltd contributed heavily to the decline, dealers said. Muslim Commercial Bank Ltd fell 2.83 per cent to Rs266.99 while Pakistan State Oil Co Ltd was down 4.41 per cent to Rs309