Global stocks mostly fall as US rally shows signs of fatigue
An analyst said “the wild streak of enthusiasm which hit markets amid hopes for a major de-escalation in the Iran conflict is tempering."
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
NEW YORK: Global stocks mostly fell Thursday (May 7) as US indices pulled back from records while Washington awaited Tehran's response to a US plan to end the Middle East war and reopen the Strait of Hormuz.
Crude oil fell sharply early in the session amid hopes for a peace deal that ends the strait disruption. But oil prices later cut losses.
The benchmark international oil contract Brent Crude finished just above US$100 at US$100.06 a barrel, down 1.2 per cent.
Major US indices were in positive territory early in the day, but finished lower. Both the S&P 500 and Nasdaq retreated from records.
"I just think the market is a little tired here after a pretty extensive run since the end of March," said Tom Cahill of Ventura Wealth Management.
"There are a lot of bits of information coming out with reference to what's going on between Iran and the United States," Cahill said. "So I think the market right now is more focused on that than anything else."
Earlier, European stock markets declined after big gains the previous session, while leading Asian markets climbed.
Tokyo soared 5.6 per cent, which largely reflected resumption of trading in Japan after public holidays this week.
"The wild streak of enthusiasm which hit markets amid hopes for a major de-escalation in the Iran conflict is tempering," noted Susannah Streeter, chief investment strategist at Wealth Club.
"There's a realization that there are more hurdles to climb for a longer-term resolution to be agreed, even though Iran is reported to be studying a US peace proposal aimed at formally ending the conflict."
US President Donald Trump said an agreement could be near after what he called positive talks. Iran said it would pass on its latest position to mediator Pakistan.
The war, launched by the United States and Israel in late February, has seen Iran respond with attacks across the Middle East and impose a chokehold on the Strait of Hormuz, the gateway to the Gulf oil and gas industries and a strategic trade route.
Norway's central bank on Thursday hiked its guiding rate by a quarter point to 4.25 per cent, citing a risk that the war in the Middle East could worsen already elevated inflation.
"Inflation is too high and has run above target for several years," Norges Bank governor Ida Wolden Bache said in a statement.
Elsewhere, Emirates Group on Thursday announced a three-per cent rise in annual profits to US$5.7 billion despite severe disruption to flights owing to the war.
Whirlpool fell 11.9 per cent as it reported an US$85 million loss on lower sales, saying that the Iran war "resulted in recession-level industry decline in the US as consumer confidence collapsed in late February and March."
Ventura's Cahill said more companies could face such pressures due to spiking gasoline prices that have left consumers strapped for cash.
"The consumer continues to feel the pinch of higher prices," he said.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app