LONDON – Major stock markets diverged yesterday, while oil prices extended a rally after Iran’s missile attack on Israel fanned fears of a Middle East-wide conflict. London’s top-tier Financial Times Stock Exchange (FTSE) 100 index rose slightly, helped by share-price gains for oil giants BP and Shell.
Paris and Frankfurt fell in early afternoon deals.
Hong Kong’s stock market surged more than 6% by the close, continuing a sharp rally after China last week unveiled a raft of measures to boost its economy, particularly the troubled property sector.
Markets were closed in Shanghai and Shenzhen for a week-long holiday, having also zoomed higher before the break. Tokyo fell more than 2%. Both main crude contracts shot up more than 3% after surging 5% at one point Tuesday.
That came in the wake of Iran firing dozens of missiles at Israel in response to the killings of Tehran-backed militant leaders.
Israel vowed it would make Iran “pay” for the launch, raising traders’ fears of shocks to crude oil supplies.
“With Israel now expected to retaliate, the chances of further escalation are high, prompting a pivot in (oil) market sentiment from concerns over excess supply to fears of shortages,” said Ricardo Evangelista, senior analyst at ActivTrades.
All three main indices on Wall Street ended Tuesday in the red, with the Nasdaq down more than 1%.
Property developers led the surge in Hong Kong, with Agile Group rocketing 160% higher and Sunac China Holdings up more than 75%.
However, the firms were still at just a fraction of their prices three years ago.
“We have seen strength for property stocks, highlighting growing confidence in a sector that will need to be the backbone of any recovery for the Chinese economy,” said Joshua Mahony, chief market analyst at Scope Markets.
“Markets clearly view the… stimulus measures as an indication that we could finally see the country turn a corner,” he added.
Dealers are awaiting, the release of key US jobs data due tomorrow, hoping for a fresh idea about the state of the world’s biggest economy and the Federal Reserve’s plans for borrowing costs after last month’s bumper cut.
– Nampa/AFP