New York (AFP) – Wall Street stocks bounced Friday to finish a volatile week on a positive note, greeting a drop in oil prices on hopes for a US-Iran agreement that could lead to the reopening of the Strait of Hormuz. Markets weighed mixed signals from the UN General Assembly in New York this week on the state of play between Washington and Tehran.
While both US President Donald Trump and Iranian President Masoud Pezeshkian included tough rhetoric against each other in UN addresses, Iranian Foreign Minister Abbas Araghchi proposed a plan that would include the reopening of the Strait of Hormuz within seven days. “It is a dubious offer considering Iran hasn’t changed its conditions from before,” said Patrick O’Hare, an analyst at Briefing.com. “We’ll see how long the glow of Iran’s offer lasts.”
But Angelo Kourkafas of Edward Jones said “there is some hope for a diplomatic way to the war in the Middle East with oil prices falling a little bit today.” Investors seemed to settle on a glass-half-full perspective, leading to a more two percent drop in oil prices, while major US stock indices were in positive territory most of the day. The broad-based S&P 500 finished up 0.5 percent. “We have a tug-of-war between rising interest rates and volatile energy prices against very solid corporate and economic fundamentals,” Kourkafas said.
Inflation fears from the Strait of Hormuz closure, alongside the risk of further Gulf supply cuts due to Houthi strikes on Saudi infrastructure on the Red Sea, have again pushed up government bond yields, with investors demanding higher returns for lending money. The benchmark US 10-year Treasury yield hit its highest level since 2007 on Thursday, and Japan’s government bond yields also hit multi-year highs.
Bank of England Governor Andrew Bailey hinted meanwhile that it could also follow the European Central Bank and US Federal Reserve in hiking interest rates in the coming months, which could curtail inflation but slow economic growth.
As for equities, “a seemingly amicable meeting” between US President Donald Trump and his Chinese counterpart Xi Jinping in Washington helped lift investor sentiment, said Dan Coatsworth, head of markets at AJ Bell. However, the nations’ extension of a trade truce by two months until January was far less than the two years the Chinese had hoped for. “US-China trade risks remain…(with) issues over tariffs, agricultural purchases, rare earths, and technology restrictions unresolved,” said MUFG market strategist Lloyd Chan.
Trump said he discussed the stalled Iran war with Xi, and the two leaders confirmed that they would meet for a third and fourth time this year at international summits in China and the United States.
– Key figures at around 2015 GMT –
Brent North Sea Crude: DOWN 2.1 percent at $104.32 per barrel
West Texas Intermediate: DOWN 2.3 percent at $92.41 per barrel
New York – Dow: UP 0.9 percent at 51,828.62 (close)
New York – S&P 500 : UP 0.5 percent at 7,743.41 (close)
New York – Nasdaq: UP 0.5 percent at 27,068.72 (close)
London – FTSE 100: UP 0.1 percent at 10,695.25 (close)
Paris – CAC 40: FLAT at 8,077.80 (close)
Frankfurt – DAX: UP 0.6 percent at 25,408.64 (close)
Tokyo – Nikkei 225: UP 1.3 percent at 66,364.20 (close)
Hong Kong – Hang Seng Index: DOWN 1.0 percent at 24,510.09 (close)
Shanghai – Composite: closed for holiday
Euro/dollar: UP at $1.1399 from $1.1380 on Thursday
Pound/dollar: UP at $1.3251 from $1.3219
Euro/pound: DOWN at 86.03 pence from 86.08
Dollar/yen: DOWN at 157.20 from 158.86
burs-jmb/mjf
© 2024 AFP
