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Oil retreat lifts Asian equities

A modest pullback in oil prices on Tuesday supported a strong rebound in Asian equities as markets weighed tentative signs of renewed diplomacy between the US and Iran against continuing risks to energy supplies. US stocks had ended mostly lower on Monday, while Japanese, South Korean and Chinese shares advanced in Asian trading. The US dollar index rose slightly to start the week, with gold gaining 1.2% to USD 4060 per ounce and bitcoin up 2.3% at 65,600. Oil was trading slightly lower, with Brent crude oil around USD 89 per barrel and West Texas Intermediate (WTI) around USD 82. Investors will also look to quarterly results from Alphabet, Tesla and Intel later this week for evidence that investment in AI infrastructure continues to support returns.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

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Asian equities rose on Tuesday after oil prices edged lower as mediation efforts raised hopes of a 10-day ceasefire between the US and Iran, although threats by Yemen’s Houthi rebels to blockade Saudi Arabia limited the decline. Japan’s Nikkei 225 gained 2.5%, while Korea’s Kospi rebounded 3.2% after falling almost 5% on Monday, supported by advances in Samsung Electronics and SK Hynix. Mainland China’s CSI 300 added 1.8%, while Hong Kong’s Hang Seng Index slipped 0.2%. Investors are awaiting earnings from US technology companies including Alphabet, Tesla and Intel later this week for evidence that investment in AI-infrastructure continues to support returns.

US stocks retreat as Middle East risks persist

US equities gave up early gains on Monday as investors remained cautious amid the Middle East conflict and its implications for oil prices. The Dow Jones Industrial Average fell 0.6% to 51,839.26 points, while the S&P 500 declined 0.2% to 7443.28 points and the Nasdaq-100 was little changed at 28,604.24 points. Google parent Alphabet gained 1.5% following reports of a new chip designed to improve AI-model efficiency.

European shares fall on Iran war concerns

European equities edged lower on Monday as the continuing war between the US and Iran and volatile oil prices restrained risk appetite. The Euro Stoxx 50 fell 0.1% to 6224.75 points, while Switzerland’s SMI lost 0.6%. Energy shares outperformed, whereas travel and leisure stocks weakened as higher fuel costs weighed on the sector.

Burnham takes office as UK prime minister

Andy Burnham became UK prime minister on Monday, succeeding Keir Starmer after winning the Labour leadership unopposed. Investors initially showed concern over Burnham’s more left-leaning agenda, but gilt markets have remained broadly calm amid expectations that his government will avoid major policy changes this year. Burnham pledged greater public control over essential services and industrial support, while US President Donald Trump backed his plan to accelerate North Sea oil and gas development.

Corporate and economic calendar

Corporate news in focus: quarterly figures from Charles Schwab, Chubb, Danaher, Julius Baer, Marsh McLennan, and Novartis.

Economic data in focus: UK unemployment rate (08:00), Swiss trade balance (08:00), Bank Lending Survey of the European Central Bank (10:00), German ZEW Indicator of Economic Sentiment (11:00).

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