London (AFP) – Oil prices rose and stocks fell Friday as initial optimism over US President Donald Trump’s decision to again delay his deadline for strikes on Iran’s energy assets faded. Trump has extended a deadline for Tehran to open the Strait of Hormuz or face the destruction of its energy assets, pushing it from Friday to April 6. But with Iran maintaining a hold on the strait, Trump’s announcement largely failed to lift the mood for markets.
Oil prices climbed, with international benchmark Brent crude rising 2.6 percent to $104.49. The US benchmark oil contract, WTI, jumped 4.1 percent to $98.39. Wall Street stocks were down by one percent or more in early afternoon trading. European stocks fell, and Asian markets ended the day mostly lower. Friday’s market reaction contrasted with the sharp plunge in oil prices and gains for stocks after Trump first delayed the deadline earlier this week.
“Trump appears to be losing his grip on the markets,” said FOREX.com analyst Fawad Razaqzada. “Investors no longer seem to take his statements at face value — if anything, they’re beginning to trade against them, waiting for tangible proof before reacting,” he added. Kathleen Brooks, research director at XTB, said: “Investors are facing the facts: the Strait of Hormuz is effectively closed and it does not appear that there is a real end in sight to the war.”
Trump has insisted Iran wanted “to make a deal” to end the war engulfing the region, but Iranian leaders have indicated no let-up in reprisal attacks against Israel and targets across the Gulf. Kuwait said Friday its main commercial port was damaged in a drone attack. Iran’s Tasnim news agency said the country has responded to Washington’s 15-point plan to end the war and was awaiting a reply. The report, citing an unnamed source, said officials had called for an end to US-Israeli attacks on Iran and Tehran-backed groups elsewhere in the region. It also called for war reparations and for Iran’s sovereignty over the Strait of Hormuz to be respected.
“The simple fact is that sentiment is likely to stay negative for as long as the Strait of Hormuz remains unsafe for shipping and controlled by Iran,” said David Morrison, analyst at Trade Nation. Adding to market woes, China on Friday opened an investigation into US trade practices in response to Washington’s probes this month of Beijing’s exports. Tokyo’s stock market closed lower, while Hong Kong and Shanghai edged up.
The market’s doubts about the chance of a peace deal came as governments around the world looked to shore up their economies against surging energy costs, which are adding to inflationary pressures. Vietnam temporarily waived an environmental levy on fuel to cut petrol prices by more than a quarter. India said it had lowered fuel taxes, and Japan is looking to temporarily lift restrictions on coal-fired power plants in a bid to ease an energy crunch. Spain, Poland, and South Korea earlier this week announced support plans that included fuel tax cuts.
– Key figures at around 1630 GMT –
Brent North Sea Crude: UP 2.6 percent at $104.49 a barrel
West Texas Intermediate: UP 4.1 percent at $98.39 a barrel
New York – Dow: DOWN 1.1 percent at 45,474.90 points
New York – S&P 500: DOWN 1.0 percent at 6,414.18
New York – Nasdaq Composite: DOWN 1.4 percent at 21,110.59
London – FTSE 100: DOWN less than 0.1 percent at 9,701.95 (close)
Paris – CAC 40: DOWN 0.9 percent at 7,701.95 (close)
Frankfurt – DAX: DOWN 1.4 percent at 22,300.75 (close)
Tokyo – Nikkei 225: DOWN 0.4 percent at 53,373.07 (close)
Hong Kong – Hang Seng Index: UP 0.4 percent at 24,951.88 (close)
Shanghai – Composite: UP 0.6 percent at 3,913.72 (close)
Euro/dollar: UP at $1.1524 from $1.1523 on Thursday
Pound/dollar: DOWN at $1.3291 from $1.3313
Dollar/yen: UP at 160.10 yen from 159.83 yen
Euro/pound: UP at 86.72 pence from 86.55 pence
© 2024 AFP
