Oil rose again and world shares were mostly down Thursday due to skepticism over a fragile ceasefire between the US and Iran.
Investors were closely watching whether a two-week ceasefire between the US and Iran was already slipping after a round of intense Israeli strikes on Lebanon which killed and injured hundreds. Iran again closed the Strait of Hormuz, in response to the attacks in Lebanon.
The TAIEX rose 0.29 percent, while other Asian markets closed mostly lower. Tokyo’s Nikkei 225 dropped 0.7 percent, South Korea’s KOSPI lost 1.6 percent, Hong Kong’s Hang Seng Index fell 0.5 percent and the Shanghai Composite Index was down 0.7 percent. Australia’s S&P/ASX 200 edged up 0.2 percent, while India’s Sensex dropped 1.6 percent.
Photo: Liao Chen-huei, Taipei Times
London, Paris and Frankfurt fell on Thursday morning, with US futures also in negative territory.
Fears that the ceasefire could fall apart while crude remained stuck in Hormuz saw both main crude contracts rise more than 3 percent, following sharp losses on Wednesday. Brent crude, the international standard, was up 3.5 percent to US$98.09 per barrel, while benchmark US crude was 3.6 percent higher at US$97.83 a barrel.
“[Oil] prices rebounded as fighting in the Middle East continued, and the ceasefire outlook deteriorated, keeping uncertainty around the Strait of Hormuz firmly in focus,” ING Bank NV analysts Ewa Manthey and Warren Patterson wrote in a note yesterday.
Attention is also turning to crunch talks in Pakistan that are expected to start tomorrow, with US Vice President JD Vance leading the US delegation. US President Donald Trump posted on his Truth Social media platform that the US military would remain around Iran “until such time as the REAL AGREEMENT reached is fully complied with.”
“Many questions remain with the 10-point plan that Trump has received from Iran, which is at odds with Trump’s 15-point peace plan,” National Australia Bank Ltd analyst Skye Masters said.
The 10-point plan includes Iranian control of the Strait of Hormuz, US acceptance of Iran’s uranium enrichment program, the end of all sanctions and withdrawal of the US military from the Gulf region.
Still, observers warned that an end to the conflict would not see a quick return to normal.
“It should also be noted that there has been significant damage to infrastructure in some major energy exporters,” RBC BlueBay Asset Management LLP managing director Anthony Kettle said.
“Even if the ceasefire holds it will take time for energy exports from the region to return to more normalized levels, so there will be an impact on growth and inflation that is still difficult to ascertain.”
In other dealings, gold and silver prices fell. Gold’s price dropped 0.6 percent to US$4,750.20 an ounce. The price of silver fell 1.7 percent to US$74.08 per ounce.
The US dollar rose to ￥158.95 from ￥158.57. The euro was trading at US$1.1675, up from US$1.1663.
Additional reporting by AFP
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