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Stocks fall on flare-up in Strait of Hormuz

Asian equities moved lower on Friday as renewed hostilities between the US and Iran in the Strait of Hormuz undermined hopes for a lasting truce and lifted oil prices. US and European stock markets had already ended Thursday in negative territory, while oil and gold climbed. Investors will turn their attention towards the US non-farm payrolls report due this afternoon, which is expected to point to a moderation in April job creation, although recent labour market indicators suggest employment conditions in the US have stayed relatively steady. 

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

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Asian stocks declined on Friday as renewed military action between the US and Iran in the Strait of Hormuz weakened hopes for a peace deal, while higher oil prices added to investor concerns. Australia’s S&P/ASX 200 was down 1.6%, Hong Kong’s Hang Seng Index fell 1% and mainland China’s CSI 300 lost 0.6%, while Japan’s Nikkei 225 was trading 0.4% lower. Korea’s Kospi was little changed, while India’s Nifty 50 was down 0.5% on Friday. Markets were also pressured by expectations of higher inflation and tighter monetary policy, with stronger Japanese wage data supporting prospects of a Bank of Japan rate increase. Oil prices climbed on Friday after the US and Iran exchanged fire in the Strait of Hormuz, raising concerns that their fragile ceasefire could collapse and prolong disruption along a key global shipping route. Gold prices were trading around USD 4720 per ounce on Friday, the US dollar was little changed and bitcoin slipped below USD 80,000.

US stocks fall on Middle East fears

US stock markets closed lower on Thursday as renewed uncertainty over the Middle East and a rebound in oil prices prompted investors to take profits after a strong recent run. The Dow Jones Industrial Average fell 0.6% to 49,596.97, the S&P 500 lost 0.4% to 7337.11 and the Nasdaq 100 slipped 0.1% to 28,563.95, after all three indices had earlier touched record or near-record levels. Sentiment deteriorated after reports that the US could consider restoring a blockade of the Strait of Hormuz, while Iranian media reported explosions near Bandar Abbas and exchanges of fire with hostile forces. US Treasury yields shot up on Thursday, with the two-year yield around 3.9% and the ten-year yield near 4.4%.

Norway's central bank raises key rate amid uncertainty

Norges Bank raised Norway’s policy rate to 4.25% from 4% at its meeting on Wednesday, saying inflation remains too high and the economic outlook has changed little since March. Consumer price inflation rose to 3.6% in March, while core inflation was unchanged at 3%, and the central bank said wage growth prospects were broadly in line with its earlier projections. The Norges Bank said elevated oil prices linked to the Middle East conflict could add to price pressures, although a stronger krone may help restrain imported inflation. It added that its March rate path, which pointed to the policy rate reaching between 4.25% and 4.5% by year-end, still appeared broadly appropriate.

European stock indices ended lower on Thursday. The Euro Stoxx 50 fell 1%, while Germany’s DAX lost 1% and France’s CAC 40 dropped 1.2%. Switzerland’s SMI also closed 1.1% lower on Thursday.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Commerzbank, Intesa Sanpaolo, and Toyota.

Economic data in focus: German trade balance and manufacturing production (08:00), SECO Swiss consumer sentiment (09:00), ECB President Christine Lagarde speaks (09:00), US nonfarm payrolls (14:30), Canadian unemployment rate (14:30), University of Michigan Consumer Sentiment Index (16:00).

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