Stocks Rise, Oil Pares Gain After Report of Talks: Markets Wrap
(Bloomberg) — Equities extended their gains as dip buyers emerged on optimism that Iran and the US may be able to prevent further escalation of the conflict.
Asian shares rose 0.7% with gains in Japan and South Korea in excess of 1.5%. Brent crude pared gains of as much as 2.6% earlier Monday to rise 0.7% to trade just below $110 a barrel.
Also aiding the sentiment was a report in Axios that the US, Iran and a group of regional mediators are discussing the terms for a potential 45-day ceasefire that could lead to a permanent end to the war. The report cited four US, Israeli and regional sources with knowledge of the talks.
“Asian markets in particular tend to react quickly to any sign that worst-case scenarios, like a full disruption of oil flows, might be avoided,” said Tareck Horchani, head of sales trading prime brokerage at Maybank Securities. “That’s why you’re seeing a modest rebound, especially in sectors like semiconductors and cyclicals.”
The fallout from the Iran war has rapidly darkened the economic outlook by threatening to cool growth and push up already elevated inflation, roiling bets on whether the Federal Reserve will resume cutting interest rates later this year. Attention remains firmly on energy prices and the closure of the Strait of Hormuz — a waterway crucial for the flow of oil from the Middle East.
“The prediction game remains quite tricky for investors,” said Homin Lee, a strategist at Lombard Odier in Singapore. “Investors’ focus will squarely be on military actions on both sides of the Persian Gulf and whether or not Hormuz vessel crossings can improve further despite these attacks.”
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.4% as of 11:34 a.m. Tokyo time
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Nikkei 225 futures (OSE) rose 1.6%
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Japan’s Topix rose 0.9%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.1523
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The Japanese yen was little changed at 159.57 per dollar
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The offshore yuan was little changed at 6.8816 per dollar
Cryptocurrencies
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Bitcoin rose 2.5% to $69,349.59
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Ether rose 3.4% to $2,138.56
Bonds
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The yield on 10-year Treasuries advanced one basis point to 4.35%
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Japan’s 10-year yield advanced three basis points to 2.410%
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Australia’s 10-year yield was unchanged at 5.04%
Commodities
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West Texas Intermediate crude fell 0.5% to $110.99 a barrel
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Spot gold fell 0.5% to $4,655.43 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Alice French and Kentaro Tsutsumi.
More stories like this are available on bloomberg.com
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