Global stocks retreat as renewed tensions around the key oil route overshadow Wall Street’s latest technology-led record…..
Oil prices moved higher on Wednesday as renewed attacks around the Strait of Hormuz revived concerns over the security of one of the world’s most important oil shipping routes, while stocks came under pressure across major markets.
The latest rally in crude came after reports that Iran had stepped up attacks on tankers passing through the strategic waterway, raising fresh questions about the reliability of Middle East supplies despite signs that exports from other countries in the region are recovering.
Brent crude, the global benchmark, rose 0.7 percent to $101.23 a barrel, while West Texas Intermediate gained 0.5 percent to $89.88.
The renewed concerns reversed some of the relief seen earlier in the week, when indications that oil exports from the Middle East, excluding Iran, were returning towards pre-war levels helped push Brent below $100 and WTI under $90.
That decline had offered some comfort to investors worried about inflation, with lower energy prices potentially giving central banks more room to avoid further interest-rate increases.
But the optimism faded after new figures pointed to an increase in attacks on tankers in and around the Strait of Hormuz.
UK Maritime Trade Operations said nine attacks had been recorded so far this month, already amounting to half of the total reported in September across the waterway and the Gulf.
The situation was further complicated by developments involving Yemen’s Houthi movement. The group claimed responsibility for an attack on Riyadh’s main airport and rejected reports that it had been driven back by government forces.
Yemen’s military, however, said it had pushed the Iran-aligned group out of areas around the Bab al-Mandeb Strait and the port city of Mocha.
The competing claims have added another layer of uncertainty to an already fragile regional energy market.
Oil officials have also warned that global stockpiles are being depleted, potentially reducing the ability of governments to cushion consumers and economies against a prolonged supply shock.
Chris Weston of Pepperstone said increased flows from parts of the region had placed some downward pressure on crude prices, but that had been offset by conflicting reports over the scale of attacks on vessels using the Strait of Hormuz.
“For now, the market remains highly sensitive to headlines and geopolitical risk,” Weston said.
The renewed oil-market concerns were reflected across global equities, with major Asian and European markets losing ground after a strong session in the United States.
Tokyo’s Nikkei 225 fell 0.9 percent to 70,035.71, while Hong Kong’s Hang Seng Index declined 0.6 percent to 24,130.50.
Markets in Singapore, Sydney, Seoul, Wellington, Jakarta and Taipei also finished lower, although Bangkok and Manila recorded gains.
In India, Mumbai stocks slipped after the country’s central bank raised interest rates for the first time in more than three years, as the Middle East conflict continues to keep inflation above the bank’s target. The Indian rupee was little changed following the decision.
European markets followed the broader trend, with London, Paris and Frankfurt all trading lower.
The declines came a day after Wall Street posted another record performance, powered largely by renewed enthusiasm for technology and artificial-intelligence companies.
The Nasdaq and S&P 500 extended their gains as investors returned to the AI trade ahead of the latest corporate earnings season.
Analysts expect earnings among S&P 500 companies to rise by about 25 percent year-on-year, according to Bloomberg Intelligence data.
Nvidia was again at the centre of the rally, with the chipmaker’s market value climbing close to $5.7 trillion.
Investor appetite for AI stocks was also supported by a Financial Times report that SpaceX was considering raising $40 billion to finance purchases of Nvidia chips.
The renewed enthusiasm marks a sharp turnaround from the sell-off that hit technology stocks during the summer, when investors began questioning whether the huge sums being poured into artificial intelligence had pushed valuations too far and whether the investments would ultimately generate sufficient returns.
At around 0810 GMT, the dollar stood at 158.21 yen, compared with 158.17 yen on Tuesday, while the euro traded at $1.1193, down from $1.1257.
The pound fell to $1.3226 from $1.3275, while the euro traded at 84.55 pence against the pound, compared with 84.81 pence previously.
On Wall Street, the Dow Jones Industrial Average closed 0.5 percent higher at 51,521.28.
With tensions around the Strait of Hormuz continuing to shape market sentiment, investors are now watching closely for any further disruption to tanker traffic and its potential impact on global oil supplies, inflation and interest rates.
