New York (AFP) – Oil prices jumped Tuesday as traders turned cautious over the prospect of a negotiated agreement between the United States and Iran to end the Middle East war. European stocks held largely steady while Wall Street’s major indexes lost ground, after strong gains Monday on President Donald Trump’s delay of strikes on Iranian energy sites and his announcement of positive talks with Iran. Asian equities caught up with the strong gains Tuesday, but the rally fizzled in the European and US sessions. Oil prices, which tumbled on Monday, rebounded with Brent popping back above $100 a barrel.
“The Iran war is not over, and the Strait of Hormuz remains closed,” said Kathleen Brooks, research director at XTB. “It will take more conciliatory remarks from Donald Trump to extend Monday’s recovery rally and give hope that the war is close to wrapping up,” she said. Patrick O’Hare of Briefing.com said he believed the market’s mixed showing reflected how it was “caught in limbo,” not knowing what happens next in the war. “It’s tough to have conviction one way or the other, knowing you can get burned one way or the other based on what could happen overnight,” he said.
Although Trump stepped back Monday from his threat to attack energy sites, citing “very good” talks to end the war, Tehran’s parliamentary speaker said “no negotiations” were underway. The speaker, Mohammad Bagher Ghalibaf, also alleged that Trump was seeking “to manipulate the financial and oil markets.” Hours after Trump’s apparent U-turn, Iranian media reported that Israeli-US strikes targeted two gas facilities and a pipeline.
– Growing questions –
“Markets (are) increasingly questioning the validity of Trump’s claim of positive negotiations with Iran,” said Joshua Mahony, chief market analyst at Scope Markets. The economic impact of the war is also becoming clearer. Business activity in the eurozone slowed significantly in March, according to a closely watched survey published Tuesday, as the war sent energy prices surging and disrupted global supply chains. The HCOB Flash Eurozone purchasing managers’ index registered a significantly lower figure of 50.5 for March, down from 51.9 in February. A reading above 50 indicates growth.
“The flash Eurozone PMI is ringing stagflation alarm bells as the war in the Middle East drives prices sharply higher while stifling growth,” said Chris Williamson, chief business economist at S&P Global Market Intelligence, which published the findings. Iran’s choking of the Strait is also impacting airlines, with Lufthansa, Cathay Pacific, and Air France extending flight suspensions to destinations across the Middle East. Lufthansa shares fell nearly two percent and Air France-KLM shares ended the day down three percent.
– Key figures at around 2005 GMT –
Brent North Sea Crude: UP 4.6 percent at $104.49 a barrel
West Texas Intermediate: UP 4.8 percent at $92.35 a barrel
New York – Dow: DOWN 0.2 percent at 46,124.06 points (close)
New York – S&P 500: DOWN 0.4 percent at 6,556.37 (close)
New York – Nasdaq Composite: DOWN 0.8 percent at 21,761.89 (close)
London – FTSE 100: UP 0.7 percent at 9,965.16 (close)
Paris – CAC 40: UP 0.2 percent at 7,743.92 (close)
Frankfurt – DAX: DOWN less than 0.1 percent at 22,636.91 (close)
Tokyo – Nikkei 225: UP 1.4 percent at 52,252.28 (close)
Hong Kong – Hang Seng Index: UP 2.8 percent at 25,063.71 (close)
Shanghai – Composite: UP 1.8 percent at 3,881.28 (close)
Euro/dollar: DOWN at $1.1583 from $1.1616 on Monday
Pound/dollar: DOWN at $1.3381 from $1.3437
Dollar/yen: UP at 159.03 yen from 158.34 yen
Euro/pound: UP at 86.57 pence from 86.45 pence
© 2024 AFP
