• Asian shares track Wall Street lower
  • Middle East markets dropped on Monday
  • Oil prices gained on tightening supply
  • Dollar, gold started the day strong

Global markets

Asian shares dropped during early trading on Tuesday, tracking a retreat on Wall Street on escalating trade tensions between the United States and China.

MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.2 percent.

Overnight on Wall Street, The Dow fell about 0.7 percent and the S&P 500 slipped 0.35 percent overnight.

“Wall Street weakness amid the latest flare up in trade conflict concerns is a negative factor for equities. Some markets, like Japan’s, have positive factors to fall back on like the weaker yen, but such support could be negated if the Chinese market is hit by volatility,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo, told Reuters.

Middle East markets

Most stock markets in the region dropped on Monday, following a retreat in global markets on trade concerns.

Dubai’s index dropped 0.3 percent as Drake and Scull International (DSI) retreated 2.6 percent.

Abu Dhabi’s index edged down 0.1 percent. Aldar Properties, one of the most traded stock in terms of volumes on the exchange on Monday, recovered early trade losses to close 1.1 percent up at 1.8 dirhams.

The Kuwaiti main index lost 0.1 percent, reversing some of what it had gained ahead of joining of the FTSE Russell emerging market index this week, a development expected to draw investment from passive funds.

Egypt’s index fell 0.4 percent, despite Orascom Investment Holding surging 5.9 percent and Egyptian Resorts Company adding 10 percent.

Saudi Arabia's stock market was closed for the country's national day, Qatar’s index dropped 0.4 percent, while Bahrain’s index gained 0.4 percent and Oman’s index dropped 0.7 percent.

Oil prices

Oil prices added gains in early trading on Tuesday. Fears of tightening supply from upcoming sanctions on Iran have been supporting prices.

Brent crude futures were at $81.32 per barrel at 0209 GMT, up 12 cents, or 0.2 percent, and not far off the $81.48 a barrel peak reached the previous day, the highest since November 2014.

U.S. West Texas Intermediate (WTI) crude futures were at $72.10 a barrel, up 2 cents from their last settlement.

According to a Reuter report, Bank of America Merrill Lynch said it has lifted its average Brent crude oil price forecast for 2019 from $75 per barrel to $80 per barrel, while it increased its WTI crude oil forecast by $2 to $71 per barrel in 2019.

The U.S. bank said “the Iran factor may dominate the market near-term and cause a (crude price) spike,” although it added that emerging market “demand concerns could reappear thereafter.”

Currencies

The dollar was strong early on Tuesday, as financial markets remained cautious about the U.S. China trade war.

The dollar index, which measures the greenback against a basket of six currencies, was about 0.1 percent higher at 94.274.

Against the Japanese yen, the dollar rose about 0.1 percent to 112.91 yen.

Precious metals

Gold prices steadied on Tuesday after dropping previously in the week on a strong dollar.

Spot gold was barely changed at $1,198.28 by 0056 GMT.

U.S. gold futures were down 0.2 percent at $1,202.60 an ounce.

(Writing by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@thomsonreuters.com)

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