Morgan Stanley Says Sell Asian Stock Rally on Iran War Impact

Morgan Stanley recommended investors sell into this week’s rally in Asian equities, warning of a deeper market downturn as energy prices surge.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Morgan Stanley recommended investors sell into this week’s rally in Asian equities, warning of a deeper market downturn as energy prices surge.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.Brent crude has traded closer to the bank’s adverse scenario of $120 to $130 per barrel, strategists including Jonathan Garner wrote in a note. An overnight attack on a major liquefied natural gas site in Qatar may also hurt crucial LNG exports to Asia. “Asia is more vulnerable than other regions to the ongoing interruption in oil, LNG,” they wrote in the Thursday note. “In the adverse scenario, we would expect Asian markets to resolve down towards our bear case targets, which are 15%-20% below current levels.”Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Asia’s stock benchmark rose for three straight days through Wednesday as investors shifted their focus to the region’s artificial intelligence winners following bullish comments on AI demand from Nvidia Corp.

Chief Jensen Huang.The bearish view on Asian shares stands in contrast to a growing chorus among market experts calling for a rebound in US stocks. While global markets have come under pressure this month amid geopolitical risks and rising energy costs, US assets have remained relatively resilient thanks to its status as a net energy exporter. The S&P 500 Index has fallen only 3.7% so far in March compared to a 7.6% drop in the Asian benchmark.Surging oil prices due to the Iran war is weighing on the economies of net energy importers, which are predominantly located in Asia. Brent crude topped $112 per barrel on Thursday as the war in Iran escalated. Asia is also vulnerable to disruptions in other input products to agricultural and industrial production including ammonia, urea, helium and sulfur, Morgan Stanley strategists said. Other factors weighing on regional markets include signals from the Federal Reserve that it may keep rates on hold amid a potentially stagflationary macro environment, they said.Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.365 Bloor Street East, Toronto, Ontario, M4W 3L4© 2026 Financial Post, a division of Postmedia Network Inc. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.You can manage saved articles in your account.and save up to 100 articles!You can manage your saved articles in your account and clicking the X located at the bottom right of the article.