Oil rally resumes as Hormuz uncertainty weighs on global markets

NEW YORK, Aug 7 — Oil prices barreled higher again Thursday, extending their volatile run, while global stock markets had a mixed day ahead of key US employment data.

With traders awaiting developments surrounding the Strait of Hormuz, the main oil contracts rose, Brent crude adding nearly 4 per cent, while the main US contract WTI added nearly 3 per cent.

Reports that a potential agreement bars US and Israeli vessels from entering the Strait have dampened expectations, said Again Capital’s John Kilduff.

“This situation is just far from settled and you can only give hope so much of a chance, so the market is taking back some of the optimism about the situation,” Kilduff said.

The rebound in oil prices weighed on US equity markets, with the Dow retreating from a record close and the Nasdaq ending flat.

Adding to the caution, US investors are looking ahead to Friday’s monthly government jobs report.

European main indices closed mixed with London’s FTSE 100 losing 0.2 per cent while Frankfurt and Paris climbed modestly, though fresh highs proved elusive.

“Rising oil prices have crimped some of the optimism seen earlier in the week – but the price is still much lower than a week ago, providing a positive tailwind as we move into the second week of August,” said Chris Beauchamp, chief market analyst at online trading and investing platform IG.

Alcohol giant Diageo jumped seven per cent to top London’s FTSE 100 index as it unveiled a major cost-cutting plan aiming to reverse sliding profits.

Shares in the German industrial giant Siemens fell five per cent in Frankfurt, but pulled more than half of that back, after its profit forecasts fell short of investors’ hopes.

In Asia, tech-heavy indices were weighed down by concerns over the profitability of AI investments after disappointing earnings from US giants SanDisk and Western Digital.

Tech stocks staged a rally earlier this week after a month-long rout that slashed billions of dollars off valuations.

Seoul, the poster child of the sell-off since June, shed more than 4per cent on Thursday, led by a 10 per cent plunge in SK hynix and Samsung’s loss of more than 6 per cent.

Tokyo’s Nikkei, another tech-heavy index, lost nearly 1 per cent, with chipmaker Kioxia down more than 10 per cent and Tokyo Electron more than 5 per cent lower.

Hong Kong, Wellington, Manila and Taipei fell, but Shanghai, Sydney and Singapore rose. — AFP

Key figures around 2020 GMT

• New York – DOW: DOWN 0.9 per cent at 53,885.10 (close)
• New York – S&P 500: DOWN 0.2 per cent at 7,709.96 (close)
• New York – NASDAQ Composite: DOWN 0.1 per cent at 26,348.35 (close)
• London – FTSE 100: DOWN 0.2 per cent at 10,867.89 points (close)
• Paris – CAC 40: UP 0.4 per cent at 8,699.71 (close)
• Frankfurt – DAX: UP 0.1 per cent at 26,140.18 (close)
• Tokyo – Nikkei 225: DOWN 0.9 per cent at 65,683.26 (close)
• Hong Kong – Hang Seng Index: DOWN 1.5 per cent at 25,530.28 (close)
• Shanghai – Composite: UP 0.6 per cent at 3,900.35 (close)
• Seoul – Kospi: DOWN 4.6 per cent at 6,296.38 (close)
• Dollar/yen: UP at 158.40 yen from 157.75 yen on Wednesday
• Euro/dollar: DOWN at US$1.1524 (RM4.94) from US$1.1553 (RM4.95)
• Pound/dollar: DOWN at US$1.3456 (RM5.77) from US$1.3468 (RM5.78)
• Euro/pound: DOWN at 85.65 pence at 85.78 pence
• Brent North Sea Crude: UP 3.8 per cent at US$82.49 (RM353.07) per barrel
• West Texas Intermediate: UP 2.8 per cent at US$77.29 (RM330.81) per barrel

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