Global stocks rise as oil prices retreat – Pakistan Today
Global stock markets rose on Tuesday while oil prices fell as hopes of renewed US-Iran talks improved investor sentiment. Traders also focused on the possibility of the Strait of Hormuz reopening.
LONDON: Global stock markets climbed, and oil prices tumbled on Tuesday on rekindled hopes for a deal to end the Middle East war and reopen the key Strait of Hormuz to end disruptions that have sent energy prices soaring.
Wall Street’s main indices climbed, with both the S&P 500 and the Nasdaq now back at levels from before the US and Israel began bombing Iran on Feb 28.
European equity markets also rose, although London rose only 0.3 per cent as the retreat in oil prices from $100 a barrel weighed on the shares of energy majors BP and Shell.
Brent North Sea Crude fell 3.1pc at $96.23 a barrel and the West Texas Intermediate plunged 5.5pc at $93.67 a barrel.
Asia’s leading stock markets closed with sizeable gains, while the dollar, seen as a haven in times of market turmoil, dropped against its main rivals.
The United States said “the ball is in the Iranian court” on ending the Mideast conflict as diplomats accelerated efforts for a new round of peace talks after weekend negotiations failed to produce a deal.
“Stocks saw an upswing while oil prices took a dip following President Donald Trump’s suggestion to reopen talks with Iran, sparking optimism for a potential agreement that might alleviate tensions in the Middle East,” said Patrick Munnelly, a market strategist at Tickmill Group.
Trump said Iranian representatives had called Washington since a US delegation returned empty-handed from negotiations in Islamabad. “They’d like to make a deal. Very badly, very badly,” Trump told reporters.
At the same time, the US has implemented a naval blockade of Iranian ports at the Strait of Hormuz, through which one-fifth of world oil passes.
Investors are “pricing in victory”, said analyst David Morrison at Trade Nation.
He said many believe the end of the conflict is a question of days, weeks or months rather than years.
“Nobody wants to be under-exposed to risk assets, let alone be short, should the war suddenly conclude, or even if the Strait of Hormuz was unblocked,” Morrison said.
