* Brent extends gains as Trump threatens 20% fee on cargo
shipping
* Asian stocks volatile, Taiwan shares fall to one-month low
* Hawkish comments from Fed's Waller lift odds of July rate
hike
(Adds investor quote in paragraph 13, updates prices
throughout)
By Gregor Stuart Hunter
SINGAPORE, July 14 (Reuters) - Stocks fell and oil hit a
one-month high in Asian trading on Tuesday after President
Donald Trump said the U.S. was reinstating its blockade of
Iranian shipping in the Gulf and would collect a 20% fee on
cargo traversing the Strait of Hormuz.
Following a volatile start to the session, MSCI's broadest index
of Asia-Pacific shares outside Japan was down
1.7%, led by declines for shares in Taiwan and South
Korea, which at their lowest point exceeded 3% and 5%,
respectively. Japan's Nikkei 225 fell 0.8%, while S&P
500 e-mini futures eased 0.3%.
Chinese stocks fell by less than the regional benchmark, with
the CSI 300 0.4% lower after export and import data
for June released on Tuesday beat economists' expectations.
Brent crude futures climbed 1.7% to $84.72 a barrel,
after earlier hitting their highest since mid-June at $85.64.
Markets were also rattled by hawkish comments on Monday from
Federal Reserve Governor Christopher Waller, who said the U.S.
central bank may need to raise interest rates "in the near term"
if data shows inflation continuing well above the 2% target.
U.S. CPI data is due for release later on Tuesday, followed
by comments from Fed Chair Kevin Warsh, who will deliver the
central bank's semi-annual monetary policy report to Congress.
"While the risk had been building in the system over the
past week, markets reacted aggressively" to the latest headlines
from the Iran conflict, said Chris Weston, head of research at
Pepperstone in Melbourne.
"The prospect of tighter monetary policy into a potential
energy shock is rarely supportive for risk assets."
Overnight, stocks on Wall Street sold off and oil futures surged
more than 9% as the conflict between the U.S. and Iran
re-ignited, once again throttling the flow of goods through the
Strait of Hormuz. The S&P 500 closed 0.8% lower and the
Nasdaq Composite fell 1.6%.
Fed funds futures are pricing in an implied 43.3%
probability of a 25-basis-point hike at the U.S. central bank's
next two-day meeting on July 28-29, compared to a 34.2% chance
on Friday, according to the CME Group's FedWatch tool.
The yield on the U.S. 10-year Treasury bond was up 1.6 basis
points at 4.624%.
The U.S. dollar index, which measures the greenback's
strength against a basket of six currencies, nudged 0.1% lower
to 101.18, trading around its highest levels of the month. Gold
was up 0.3% at $4,012.37.
"The risk to Asian markets from the re-escalation in
U.S.-Iran tensions runs mainly through the impact of higher
energy prices on currencies and policy interest rates," said
Eastspring Investments' chief investment officer Vis Nayar in a
note. "Persistently higher oil prices would increase the risk
that the U.S. Federal Reserve would hike the Fed funds rate
later this year."
In Taipei, the Taiwanese benchmark fell to a one-month low,
leading regional declines.
In Seoul, stocks moved between negative and positive territory
as shares in SK Hynix ( SKHY ) veered between gains and
losses, falling as much as 5.6% after an earlier rally. The
volatility for the memory chipmaker comes after a dramatic
plunge a day earlier following its Nasdaq debut last week.
In cryptocurrencies, bitcoin was 0.4% higher at
$62,415.22 while ether was up 0.7% at $1,778.30.