Oil falls, stocks waver as investors eye US-Iran talks

AFP | London

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Oil prices fell yesterday while stock markets diverged over conflicting headlines on talks between Iran and the US to reopen the Strait of Hormuz to Gulf crude shipments.

Hopes of an imminent deal to avoid further hostilities in the Mideast war had bolstered optimism earlier in the session, with benchmark oil contracts falling more than 5%.

But a White House statement rejecting an Iranian report about a framework deal prompted caution, even though analysts say most investors still expect the negotiations to bear fruit.

“The hope will be that this is finally the week when a real breakthrough is achieved, but should negotiations fail then we could see market patience wear thin,” said AJ Bell investment director Russ Mould.

He noted, however, that “Even if an agreement is reached, it will take time to get energy infrastructure fully back online and shipments flowing through the Strait of Hormuz at anywhere near pre-war levels.”

Investors appeared willing to look past the conflicting headlines, buoyed also by another surge for tech stocks on expectations the AI rollout will continue to propel earnings in the sector.

In Asia, South Korean chipmaker SK hynix jumped 11% to hit a $1-trillion market capitalisation, placing it alongside regional tech heavyweights Samsung Electronics and TSMC.