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Markets mixed as traders look for Iran deal

Global markets were pulled in different directions at the start of the week by escalating US-Iran tensions and tentative hopes for renewed diplomacy. US equities reversed early losses to close higher on Monday, with major indices in New York recovering all the ground lost since the start of the conflict, while European stock markets ended in negative territory as the breakdown in peace talks weighed on sentiment. In Asia, most equity markets were trading higher on Tuesday, despite weaker-than-expected Chinese export data. Oil prices eased, even as a newly announced US naval blockade of the Strait of Hormuz and warnings from Tehran kept energy markets on edge. The US Dollar Index dropped and US Treasury yields were lower across the curve and gold was trading slightly higher around USD 4770.

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

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Asia-Pacific equities traded mostly higher on Tuesday as investors remained cautiously optimistic that Washington and Tehran could still reach an agreement, even after the United States began blocking shipping to and from Iranian ports in the Strait of Hormuz on Monday. South Korea’s Kospi led regional gains with an increase of more than 3%, while Japan’s Nikkei 225 rose about 2.4% and Australia’s S&P/ASX 200 was 0.6% higher, although India’s Nifty 50 lagged with a decline of 0.9%. Oil prices fell, with West Texas Intermediate down about 2% to around USD 97 per barrel and Brent crude roughly 1% lower just under USD 100, after Iran warned that the US blockade would ultimately push global energy prices higher. Chinese data showed export growth slowed sharply in March to 2.5% year-on-year, missing market expectations, while imports expanded at their fastest pace in more than four years, as manufacturers faced higher commodity and energy costs linked to Middle East supply disruptions. Hong Kong’s Hang Seng Index edged up 0.2% and mainland China’s CSI 300 was 0.4% higher.

US equities advance on renewed Iran diplomacy hopes

US equities closed higher on Monday after initial losses, as renewed expectations of a possible agreement between the US and Iran supported market sentiment despite recently stalled peace talks. The broad S&P 500 rose 1% to 6886.24 points, fully reversing its losses since the start of the Iran conflict, while the Dow Jones Industrial Average gained 0.6% to 48,218.25 points and the technology-focused Nasdaq 100 added 1.1% to 25,383.72 points, helped by a 3.6% rise in software giant Microsoft. Hopes for fresh negotiations followed comments from US President Donald Trump that Iran was seeking a deal, even as a US naval blockade of the Strait of Hormuz took effect on Monday to curb Iranian oil revenues. In individual stocks, Goldman Sachs shares fell 1.9% after first-quarter results drew criticism for weak fixed income, currency and commodities trading.

European stocks slip on Iran tensions, Hungary rallies

European equities ended lower on Monday after peace talks between the US and Iran broke down, while Hungary’s market outperformed sharply following a decisive opposition election victory. The euro-area blue-chip index EuroStoxx 50 fell 0.4% and the Swiss SMI lost 0.3%. Hungary’s Bux index rose nearly 5% as investors welcomed the two-thirds parliamentary majority for opposition leader Peter Magyar’s Tisza party, which ends Viktor Orban’s 16-year rule and lifted hopes for market-friendly reforms that could unlock frozen EU funds. Telecoms led declines due to a sharp drop in Deutsche Telekom shares, and travel and airline stocks were avoided, in contrast to oil producers which benefited from higher crude prices.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from BlackRock, Citigroup, JPMorgan, Johnson & Johnson, and Wells Fargo.

Economic data in focus: US Producer Price Index (14:30) and European Central Bank President Christine Lagarde speaks (23:00).

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