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Global Markets Jump, Oil Prices Drop 04/08 05:09
Global shares surged in Wednesday trading, as oil prices plunged after the
U.S. and Iran agreed to a two-week ceasefire that includes the reopening of the
Strait of Hormuz.
TOKYO (AP) -- Global shares surged in Wednesday trading, as oil prices
plunged after the U.S. and Iran agreed to a two-week ceasefire that includes
the reopening of the Strait of Hormuz.
France's CAC 40 added nearly 4.0% to 8,223.91 in early trading, while the
German DAX edged up 4.7% to 23,996.26. Britain's FTSE 100 gained 2.3% to
10,582.86. U.S. shares were set to drift higher with Dow futures up 2.3% at
47,891.00. S&P 500 futures rose 2.5% to 6,824.00.
In Asia, Japan's benchmark Nikkei 225 gained 5.4% to finish at 56,308.42.
Australia's S&P/ASX 200 jumped 2.6% to 8,951.80. South Korea's Kospi soared
6.9% to 5,872.34. Hong Kong's Hang Seng surged 3.1% to 25,893.02, while the
Shanghai Composite added 2.7% to 3,995.00.
Benchmark U.S. crude sank $16.47 to $96.48 a barrel. Brent crude, the
international standard dropped $13.79 to $95.48 a barrel. Natural gas futures
declined 5%.
The drops reversed some of the rise in oil prices, following the start of
the war, which had effectively blocked passage through the strait that's a
crucial route for global supplies.
"Yet the mood remains one of cautious optimism rather than outright
celebration. The ceasefire is only two weeks long, and markets will be watching
closely to see whether shipping through the Strait of Hormuz normalizes as
promised and whether the fragile truce can pave the way for a more durable
peace agreement," said Tim Waterer, chief market analyst at KCM Trade.
Late Tuesday, Trump said he was holding off on his threatened attacks on
Iranian bridges, power plants and other civilian targets. Iran's foreign
minister said passage through the strait would be allowed for the next two
weeks under Iranian military management.
In currency trading, the U.S. dollar fell to 158.35 Japanese yen from 159.52
yen Wednesday. The euro cost $1.1671, up from $1.1597. The dollar usually
becomes a safe haven during geopolitical uncertainty, so the ceasefire deal
worked to lessen that appeal.
But analysts warned against too much optimism.
"There is a reason to be optimistic, but it is still too early to tell,
because, as you know, after all, it is Trump," said Takashi Hiroki, chief
strategist at MONEX.
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