Stocks rise, oil prices slide

2023-10-17 05:20

The main stock markets in Europe and the United States rose on Monday but oil prices fell as markets...

The main stock markets in Europe and the United States rose on Monday but oil prices fell as markets tracked the Israel-Hamas conflict.

Asian equity markets sank having caught up with losses in Europe and the United States on Friday, while the safe-haven dollar lost some strength on Monday.

Markets had taken fright on Friday at the possibility that a ground invasion by Israeli troops into northern Gaza, after a warning to civilians to evacuate, could spark a broader conflict.

"The worry was that the Israel-Hamas War would escalate and potentially turn into a wider conflict over the weekend when the stock market was closed for trading," said Briefing.com analyst Patrick O'Hare.

"That did not happen, so there is a measure of relief this morning," he added.

In the United States, the Dow ended 0.9 percent higher while the tech-heavy Nasdaq Composite jumped 1.2 percent.

This sense of relief also saw oil prices slide after reaching nearly one-week highs.

"The lack of further escalation over the weekend has helped to cap the gains thus far, while reports that the US is easing restrictions on Venezuelan oil is helping to limit the upside," said Michael Hewson, chief market analyst at CMC Markets.

Investors are also turning their attention to corporate earnings as companies begin to report third quarter results.

"The earnings season will be at full speed this week... (but) will likely remain under the shadow of mounting geopolitical tensions in the Middle East," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

US Secretary of State Antony Blinken has returned to Israel after talks in six Arab states, hoping to coordinate efforts against Hamas while finding ways to alleviate Gaza's humanitarian crisis.

Four days after he paid a lightning visit to Tel Aviv to show solidarity with Israel, Blinken flew back and went straight to talks with Prime Minister Benjamin Netanyahu at his Jerusalem office.

As Israel prepares what is expected to be a major ground operation in the Gaza Strip, Blinken met Netanyahu's security cabinet.

"The key uncertainty is whether a ground operation risks widening the conflict, with markets focused on whether Iran and its allies are drawn into the conflict," said National Australia Bank's Tapas Strickland.

Adding to unease were reports that the White House will tighten rules on Chinese access to semiconductor chips and chip-making equipment, maintaining a long-running security standoff between the superpowers despite moves to ease tensions.

Traders will be keeping a close eye on speeches this week by several Federal Reserve decision-makers, including boss Jerome Powell, hoping for some idea about their plans for interest rates.

The talks come after a number of US Fed officials in recent weeks suggested the central bank could hold rates steady at its next meeting, soothing concerns about more tightening that some observers fear could flip the world's biggest economy into recession.

- Key figures around 2050 GMT -

New York - Dow: UP 0.9 percent at 33,984.54 points (close)

New York - S&P 500: UP 1.1 percent at 4,373.63 (close)

New York - Nasdaq: UP 1.2 percent at 13,567.98 (close)

London - FTSE 100: UP 0.4 percent at 7,630.63 (close)

Frankfurt - DAX: UP 0.3 percent at 15,237.99 (close)

Paris - CAC 40: UP 0.3 percent at 7,022.19 (close)

EURO STOXX 50: UP 0.3 percent at 4,149.86 (close)

Tokyo - Nikkei 225: DOWN 2.0 percent at 31,659.03 (close)

Hong Kong - Hang Seng Index: DOWN 1.0 percent at 17,640.36 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,073.81 (close)

Brent North Sea crude: DOWN 1.4 percent at $89.65 per barrel