Global Stocks Dip, Oil Gains Further on Middle East Conflict

Euro zone stocks were last down 0.8 per cent, as investors digested weak business activity survey data from the bloc, while MSCI’s all-country index also slipped 0.2 per cent.

Asia-Pacific shares outside Japan had earlier shed 1 per cent, largely driven by Hong Kong stocks sagging after a sizzling rally, while several markets, including mainland China and South Korea, were closed for the day.

Japan’s Nikkei bucked the trend, up 2 per cent after the country’s newly elected prime minister Shigeru Ishiba said it was not the time to raise rates after meeting the central bank governor Kazuo Ueda. Bank of Japan board member Asahi Noguchi later said rates would increase cautiously and slowly.

Nasdaq futures dropped 0.5 per cent and S&P futures slipped 0.4%.

Geopolitical tensions loomed large, after Israel bombed Beirut early on Thursday, following a year of clashes with Iran-backed Hezbollah.

Oil prices gained on Thursday as concerns grew that the conflict could disrupt crude oil flows from the key exporting region, overshadowing a stronger global supply outlook.

Brent and U.S. crude futures gained around $1 each and were up at $71.11 and $74.83 respectively.

“Oil’s had a good week. But in context, you’re looking at kind of low 70s versus summer levels in the 80s. So I don’t think there’s a signal from the market to say, brace yourself for major escalation… But it’s a volatile situation,” said Eren Osman, managing director of wealth management at Arbuthnot Latham.

Source: Reuters