Global Stock Performance and Oil Prices
By Ankur Banerjee and Alun John
SINGAPORE/LONDON, April 17 (Reuters) – Global stock markets remained close to record levels on Friday, poised for a third consecutive week of gains, while oil prices remained below $100 per barrel as attention turned to a pivotal weekend that might signal a near-term resolution to the conflict in Iran.
U.S. President’s Optimism
U.S. President Donald Trump expressed optimism about a potential agreement to resolve the conflict and encouraged the Iran-aligned Hezbollah group to cease hostilities amid a 10-day ceasefire between Lebanon and Israel.
Investor Sentiment
Trump noted that the next round of talks between U.S. and Iranian negotiators could happen over the weekend. Investors have shown a positive outlook regarding signs of resolution this month, despite the Strait of Hormuz—a key passage for a significant portion of global oil and gas supplies—remaining largely closed.
Oil Prices
This optimism has kept oil prices under the $100 mark, although they are still noticeably above pre-war levels. Brent crude futures dipped about 1% to $98.5 a barrel, while U.S. West Texas Intermediate crude futures fell 1.2% to $89.1 a barrel.
Stock Market Insights
The MSCI world share index, which experienced a decline in March due to the conflict, reached a record high on Thursday and has seen an 8.5% rise in April. Ben Laidler, head of macro and equity strategy at Bradesco BBI, noted the underlying debate about whether the rally has been excessive, especially with oil prices still hovering around $100. However, he emphasized that investors are looking ahead and that relative valuations and earnings remain strong.
Need for Validation
Laidler pointed out that for the rally to sustain, stocks would require confirmation of their recent performance linked to de-escalation in Iran, driving oil prices down, and favorable first-quarter earnings. He remarked that expectations are high and must be met.
Market Reactions
While the early stages of U.S. earnings season have been predominantly positive, Netflix’s disappointing second-quarter earnings forecast led to a 9.6% drop in premarket trading on Friday. Broader market movements were subdued, as traders were hesitant to make significant investments ahead of the upcoming weekend when markets will close. Although the European STOXX 600 index, lagging behind US and Asian counterparts, saw a slight increase, U.S. S&P 500 futures also edged higher. Asian stocks experienced a small drop earlier in the day but reported weekly gains.
