Oil drops, stocks mixed amid US-Iran peace hopes / Photo: TIMOTHY A. CLARY - AFP
Stock markets diverged and oil prices fell Friday as investors awaited news of a possible extension to the Iran-US ceasefire, with a first passing of Iranian oil shipments through the Strait of Hormuz in weeks bolstering hopes.
Several indices reached record highs this week, including the S&P 500 and the Nasdaq in New York on Thursday, on signs the Middle East war could be nearing an end as US President Donald Trump said negotiators were close to a deal.
But worries abound that a shaky truce agreed earlier this month -- and which ends next week -- could fall apart and spark a fresh market rout.
Oil prices tumbled on the hopes of Gulf supply resumptions, with the international benchmark Brent down 3.0 percent at $96.42 a barrel.
After Asian stock markets mostly closed lower, the Paris and Frankfurt markets advanced in European midday deals while London dipped.
Trump on Thursday said that Iran had agreed to hand over its store of enriched uranium and that the two sides were "close" to a peace deal ending six weeks of conflict.
But Iran has given no public indication it would surrender its stockpile.
The White House has said it is discussing a possible second round of talks with Iran in the Pakistani capital Islamabad, after a first round last weekend failed to produce a deal.
Hopes were also lifted after a 10-day ceasefire agreed between neighbouring states Israel and Lebanon took effect at 2100 GMT Thursday.
"For the moment... the glass is half-full among equity investors," said Richard Hunter, head of markets at Interactive Investor.
He noted, however, that "inflation remains a concern and whatever the outcome, the present oil supply disruption will take some time to unwind".
Some Gulf Arab and European leaders fear a long-term agreement could take six months to achieve and called for the truce to cover such a time period, Bloomberg reported.
French President Emmanuel Macron and UK Prime Minister Keir Starmer were chairing a meeting of allies Friday to consider sending a multinational force to ensure free-flowing trade in the Strait of Hormuz once the conflict ends.
The strategic waterway, through which one-fifth of the world's crude oil normally flows, has been disrupted by Iran since the US-Israeli offensive began.
In Asia, Tokyo among the biggest losers after reaching a record high Thursday, and Taiwan's TAIEX index dropped after hitting a market capitalisation of $4.14 trillion.
That put the index ahead of London's benchmark FTSE 100 and made the TAIEX the world's seventh-biggest index by value, according to Bloomberg data.
- Key figures around 1045 GMT -
Brent North Sea Crude: DOWN 3.0 percent at $96.42 a barrel
West Texas Intermediate: DOWN 3.5 percent at $91.38 a barrel
London - FTSE 100: DOWN 0.2 percent at 10,565.26 points
Paris - CAC 40: UP 0.3 percent at 8,289.34
Frankfurt - DAX: UP 0.6 percent at 24,290.27
Tokyo - Nikkei 225: DOWN 1.8 percent at 58,475.90 (close)
Hong Kong - Hang Seng Index: DOWN 0.9 percent at 26,160.33 (close)
Shanghai - Composite: DOWN 0.1 percent at 4,051.43 (close)
New York - Dow Jones: UP 0.2 percent at 48,578.72 (close)
Euro/dollar: UP at $1.1795 from $1.1784 on Thursday
Pound/dollar: DOWN at $1.3527 from $1.3529
Dollar/yen: FLAT at 159.15 yen from 159.14 yen
Euro/pound: UP at 87.21 pence from 87.09 pence
E.Celis--LCdB