Oil prices fell more than 5 per cent and world shares gained on Wednesday over the possibility of a de-escalation of the Iran war and negotiations between the United States and Iran. US futures were up 0.9 per cent.
In early European trading, Britain's FTSE 100 rose 1 per cent to 10,072.60. France's CAC 40 was up 1.4 per cent to 7,855.31, while Germany's DAX was 1.6 per cent higher at 22,989.80. Tokyo's Nikkei 225 was up 2.9 per cent to 53,749.62. South Korea's Kospi gained 1.6 per cent to 5,642.21.
Hong Kong’s Hang Seng rose 1.1 per cent to 25,335.95, while the Shanghai Composite index was 1.3 per cent higher at 3,931.84. Labubu doll maker Pop Mart's Hong Kong-listed shares fell 22.5 per cent, after it announced annual revenue for last year that was largely in line with analysts’ estimates. Australia’s S&P/ASX 200 climbed 1.9 per cent. Taiwan's Taiex was up 2.5 per cent.
US President Donald Trump’s claims of progress being made from talks with Iran this week and his postponement on Monday of a deadline to “obliterate” Iran's power plants over the reopening of the Strait of Hormuz have also fuelled optimism that an end to the Iran war could come soon. With the Strait of Hormuz being a key waterway for crude oil and liquefied natural gas transport, oil and gas prices have spiked and fluctuated in recent days.
Oil prices fell again on growing hopes for a de-escalation. Brent crude, the international standard, fell 5.2 per cent to USD 94.97 per barrel. It was around USD 104 on Tuesday. Benchmark US crude was down 5.3 per cent early Wednesday to USD 87.44 a barrel.
US stocks closed lower. The S&P 500 lost 0.4 per cent to 6,556.37. The Dow Jones Industrial Average edged down 0.2 per cent to 46,124.06, while the Nasdaq composite was 0.8 per cent lower to 21,761.89.
In other dealings early on Wednesday, gold prices resumed their rise after falling earlier. It dropped in part because of rising US Treasury yields over dimming expectations of a Federal Reserve rate cut after the spike in oil prices threatened to fuel global inflation. The price of gold was up 3.6 per cent early on Wednesday to USD 4,561.90 per ounce. It was above USD 5,000 earlier this month. The US dollar was at 158.84 Japanese yen, up from 158.69. The euro was trading at 1.1602, down from USD 1.1608.
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