Stock markets rise, oil prices slide

AFP | London

The Daily Tribune – www.newsofbahrain.com

The main stock markets in Europe and the United States rose yesterday 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 as oil prices soared nearly six percent.

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 wider 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.

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 Robert 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.

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 officials in recent weeks indicated they were happy to keep US borrowing costs on hold, soothing concerns about more tightening that some observers fear could flip the world's biggest economy into recession.