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World Shares Mixed, US Futures Slip 03/17 04:49
Shares were mixed in Europe and Asia on Tuesday after a drop in oil prices
helped send the U.S. stock market to its best day since the war in Iran began.
BANGKOK (AP) -- Shares were mixed in Europe and Asia on Tuesday after a drop
in oil prices helped send the U.S. stock market to its best day since the war
in Iran began.
The reprieve in prices for crude was short-lived, with Brent crude climbing
nearly 4% early Tuesday to $104.13 a barrel. U.S. benchmark crude also climbed,
to $97.53 per barrel after dipping to about $93 on Monday.
U.S. futures fell back, with the contracts for the S&P 500 and the Dow Jones
Industrial Average down 0.3%.
In Asian trading, Tokyo's Nikkei 225 gave up early gains to slip 0.1% to
53,700.39 and the Kospi in South Korea jumped 1.6% to 5,640.48.
Hong Kong's Hang Seng added 0.1% to 25,668.54, while the Shanghai Composite
index dropped 0.9% to 4,049.91.
In Australia, the S&P/ASX 200 gained 0.4% to 8,614.30 after the central bank
hiked its benchmark interest rate to 4.1%.
Citing higher fuel prices, the Reserve Bank of Australia on Tuesday lifted
the cash rate from 3.85% which it set at its Feb. 3 meeting in response to
surging inflation. That rise was Australia's first since November 2023.
Taiwan's Taiex rose 1.5% and India's Sensex picked up 0.6%.
On Monday, the S&P 500 climbed 1% for its biggest gain in five weeks. The
Dow Jones Industrial Average added 0.8% and the Nasdaq composite jumped 1.2%.
The driver for markets has been oil prices, which have spiked from roughly
$70 before the United States and Israel began their attacks on Iran. In
response, Iran has nearly halted traffic through the narrow Strait of Hormuz,
where a fifth of the world's oil typically sails from the Persian Gulf to
customers worldwide. That has oil producers cutting production because their
crude has nowhere to go.
The worry in financial markets is that if the strait remains closed for a
long time, it could keep enough oil off the market to drive inflation up to a
debilitating level for the global economy.
"The panic is still there, just dialled down a notch as crude slipped off
the boil. Brent easing back toward $100 flipped the tape from bunker mentality
to opportunistic risk-taking in a heartbeat," Stephen Innes of SPI Asset
Management said in a commentary.
President Donald Trump over the weekend demanded that other countries hurt
by the closure of the Strait of Hormuz "take care of that passage" and said his
country "will help - A LOT!"
The U.S. and Israel have kept pummeling what they describe as military
targets in Iran's capital, and Israel stepped up its campaign against
Iran-backed militants in Lebanon. More than 1 million people have been
displaced in Lebanon -- roughly 20% of the nation's population -- as U.N.
peacekeepers say Israel is massing ground troops along the border.
Uncertainty over the war's scope and duration have roiled financial markets
since the war began just over two weeks ago, though markets have a track record
of bouncing back relatively quickly from military conflicts. Many professional
investors are expecting that to be the case again, if oil prices don't go too
high for too long. That has helped keep U.S. stock prices near their record
levels.
Higher prices are complicating the Federal Reserve's mission of balancing
growth and inflation as President Donald Trump pushes the central bank to slash
interest rates. Traders do not expect the Fed to cut rates at its policy
meeting that wraps up on Wednesday.
Nvidia, whose chips are powering much of the world's move into
artificial-intelligence technology rose 1.6% on Monday as its CEO, Jensen
Huang, talked up AI's possibilities at a conference, saying he foresaw $1
trillion in demand for AI chips through 2027. It was the strongest single force
lifting the S&P 500.
In other dealings early Tuesday, the U.S. dollar rose to 159.18 Japanese yen
from 159.05 yen. The euro slipped to $1.1498 from $1.1507.
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