London (AFP) – Oil prices jumped and most stock markets fell Thursday as investors weighed the prospects of a shaky Middle East ceasefire lasting while the Strait of Hormuz fully reopens. Traders were also locking in profits from Wednesday’s relief rally as the first-quarter earnings season gets under way, which should reveal the war’s impact on company results worldwide.
Equity markets across the globe had soared and crude oil futures plunged Wednesday after US President Donald Trump announced a two-week halt in the war against Iran, and Tehran said it would reopen the waterway that normally transports one-fifth of the world’s oil and gas. However, the ceasefire has been placed in doubt, largely by Israel’s ongoing attacks against Iran-backed Hezbollah in Lebanon, and Tehran has also stated it will impose a toll on ships transiting Hormuz.
The main US oil contract, West Texas Intermediate, rebounded over seven percent to surpass $101 a barrel before dipping once more as international calls mounted for the ceasefire to be extended following a massive wave of Israeli strikes on Lebanon that killed more than 200 people. Brent crude, meanwhile, added more than four percent to $98.80 a barrel.
“Oil prices will likely remain elevated and choppy until a more permanent agreement is struck between all parties,” said Aarin Chiekrie, equity analyst at Hargreaves Lansdown. Anthony Kettle at RBC BlueBay Asset Management cautioned that “Even if the ceasefire holds, it will take time for energy exports from the region to return to more normalized levels, so there will be an impact on growth and inflation that is still difficult to ascertain.” He added, “It should also be noted that there has been significant damage to infrastructure in some major energy exporters.”
Amid the calls for caution after Wednesday’s euphoria, Wall Street stocks opened with losses but just crawled into the green two hours into the session with the Dow, the S&P 500, and the tech-heavy Nasdaq around a quarter of one percent up. Europe’s main markets closed down, with Frankfurt shedding just north of one percent. Asian markets had earlier closed around 0.7 percent in the red.
“While progress towards a more permanent resolution in the Middle East will dominate short-term market moves, it’s earning power that drives stock prices in the long term,” Chiekrie said ahead of the first-quarter earnings season. Some companies have already begun alerting markets to the impact of the war on their earnings for the January-March period, with the conflict having started on February 28.
– Key figures at around 1545 GMT –
Brent North Sea Crude: UP 4.3 percent at $98.80 a barrel
West Texas Intermediate: UP 7.6 percent at $101.66 a barrel
New York – Dow Jones: UP 0.2 percent at 47,977.05 points
New York – S&P 500: UP 0.2 percent at 6,798.22
New York – Nasdaq: UP 0.3 percent at 22,700.14
London – FTSE 100: DOWN 0.1 percent at 10,603.48 (close)
Paris – CAC 40: DOWN 0.2 percent at 8,245.80 (close)
Frankfurt – DAX: DOWN 1.1 percent at 23,806.99 (close)
Tokyo – Nikkei 225: DOWN 0.7 percent at 55,895.32 (close)
Hong Kong – Hang Seng Index: DOWN 0.5 percent at 25,752.40 (close)
Shanghai – Composite: DOWN 0.7 percent at 3,966.17 (close)
Euro/dollar: UP at $1.1707 from $1.1667 on Wednesday
Pound/dollar: UP at $1.3437 from $1.3405
Dollar/yen: UP at 158.98 yen from 158.35 yen
Euro/pound: UP at 87.11 pence from 87.07 pence
© 2024 AFP
