Trump's Venezuela gambit tests investor risk appetite

Markets may have shrugged off the audacious US capture of Venezuelan President Nicolas Maduro, but some investors warn that geopolitical risks are perhaps being underestimated after Donald Trump threatened further action in the Americas.

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Monitors display Japan's Nikkei share average after the New Year ceremony, marking the opening of trading in 2026 at the Tokyo Stock Exchange on Monday. Investors held their nerve, with stocks in Asia surging and oil prices down modestly although safe-haven flows lifted gold prices.

(REUTERS)

Investors held their nerve on Monday, with stocks in Asia surging and oil prices down modestly although safe-haven flows lifted gold prices, after President Trump said the US would take control of the oil-producing nation.

While Washington has not made such a direct intervention in Latin America since the invasion of Panama in 1989, Trump’s threats against Colombia and Mexico highlighted the aggressive shift in US policy and brought geopolitical perils back to the fore for financial markets at the start of the year.

“We're being reminded that geopolitical risks are much larger than some number cast on imports,” said Vishnu Varathan, head of macro research for Asia Ex-Japan at Mizuho Securities in Singapore.