London (AFP) – Oil prices steadied and stocks diverged Friday in thin holiday trading, as investors awaited the next move in the Middle East crisis and digested corporate earnings. Several markets were shut in Europe and Asia for the May 1 holiday, including in France, Germany, Hong Kong and mainland China. Among markets that were open, Tokyo climbed while London fell, weighed by British bank NatWest, which reported higher quarterly net profit but warned economic conditions were deteriorating.
International oil benchmark Brent edged back up to around $111 per barrel following Thursday’s wild swings on worries about a resumption of hostilities in the Middle East. With no sign that the US and Iran were closer to a deal, investors feared a prolonged closure of the Strait of Hormuz, through which a fifth of the world’s oil supplies normally passes.
“If oil stays in the $100-a-barrel range for an extended period, the broader economic costs will eventually be harder to ignore,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown. “But for now, earnings are the bigger fish, and markets are happy to keep swimming with the current,” he added. After tumbling early in April on news of a US-Iran ceasefire, crude has spiked in recent weeks. Brent soared to a four-year high above $126 a barrel on Thursday after news platform Axios said Donald Trump would be briefed on potential fresh military strikes. The report compounded fears after the US president warned the blockade of Iranian ports could last for months.
The energy shock triggered by the war has led to concerns over rising inflation, with major central banks leaving interest rates unchanged while they assess the outlook. The European Central Bank and the Bank of England both held interest rates steady on Thursday but signalled possible increases ahead. The US Federal Reserve and the Bank of Japan also kept borrowing costs unchanged this week.
Two key Wall Street indices, the S&P 500 and the Nasdaq, ended at new records Thursday on the back of optimism surrounding corporate earnings and still-resilient US economic growth. “The latest US earnings season has been robust, which has helped prevent global markets from suffering big losses despite the impact of the Iran conflict,” said AJ Bell investment director Russ Mould. Google parent Alphabet soared 10 percent after it posted on Wednesday forecast-topping profits and solid revenue across its major divisions. After the market close on Thursday, Apple said earnings beat expectations thanks to strong iPhone demand.
On currency markets, the yen weakened slightly against the dollar a day after surging on speculation Japanese authorities had stepped in to provide support. Officials had recently warned about moves in the market that had seen the yen drop, suggesting they were ready to intervene.
– Key figures at around 1025 GMT –
Brent North Sea Crude: UP 0.7 percent to $111.20 a barrel
West Texas Intermediate: UP 0.3 percent at $105.39 a barrel
London – FTSE 100: DOWN 0.6 percent at 10,313.70
Tokyo – Nikkei 225: UP 0.4 percent at 59,513.12 (close)
Paris – CAC 40: Closed for a holiday
Frankfurt – DAX: Closed for a holiday
Hong Kong – Hang Seng Index: Closed for a holiday
Shanghai – Composite: Closed for a holiday
New York – Dow: UP 1.6 percent at 49,652.14 (close)
Dollar/yen: DOWN at 156.50 yen from 156.60 yen on Thursday
Euro/dollar: UP at $1.1742 from $1.1731
Pound/dollar: UP at $1.3608 from $1.3602
Euro/pound: UP at 86.28 pence from 86.25 pence
© 2024 AFP
