Berliner Tageblatt - Oil extends gains after fresh US strikes, stocks mostly rise

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Oil extends gains after fresh US strikes, stocks mostly rise
Oil extends gains after fresh US strikes, stocks mostly rise / Photo: © GETTY IMAGES NORTH AMERICA/AFP

Oil extends gains after fresh US strikes, stocks mostly rise

Oil prices jumped again on Tuesday after fresh US strikes against Iran that marked a new escalation in hostilities that has fuelled fears over their already fragile truce and the chances of another spike in inflation.

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However, tech firms enjoyed a much-needed reprieve after the latest bout of selling, although they only managed to claw back some of the hefty losses fuelled by growing fears over the AI boom.

The latest attacks came after Iranian forces struck a commercial ship in the Strait of Hormuz -- through which about a fifth of global oil passes -- early on Sunday, before announcing the closure of the waterway.

That led to a series of US strikes on sites in the Islamic republic, which replied by hitting targets in Bahrain, Jordan, Kuwait and Oman.

President Donald Trump told conservative radio host Hugh Hewitt on Monday before the latest US attacks that "we're going to hit them very hard tonight, and we're going to hit them hard tomorrow".

He later declared on Truth Social that the United States would be "known as 'THE GUARDIAN OF THE HORMUZ STRAIT'" and levy a 20 percent fee on all cargo shipped through the waterway.

While Iran's ports would again be blockaded, Trump said "all other countries will have fair and open use of the strait".

However, he also said a deal with Tehran to end the crisis was still possible.

"Yeah, I think a deal is possible. Sure, I do," he told reporters in the Oval Office. "We had a deal with them two days ago and then they said 'Oh we can't make that deal. We have to negotiate it further.'"

Oil prices shot up more than nine percent on Monday over fears of renewed conflict and the possibility that a fresh surge in inflation could force the Federal Reserve and other central banks to hike interest rates soon.

They continued to rise on Tuesday, piling on more than one percent.

"With Trump, one never quite knows how seriously to take such pronouncements, but Gulf allies would not be pleased with this plan, and it almost certainly violates international law," said BNZ's Jason Wong.

"The 20 percent levy would add about $16 to the cost of every barrel of oil passing through the strait on a typical supertanker.

"It remains to be seen whether the plan will stick -- probably not -- and whether it is merely a negotiating tactic aimed at getting Iran to pause its military strikes on shipping in the area."

Equity markets mostly rose after seeing through the day, though confidence remains fragile as traders worry that the sector's AI-led rally has gone too far.

Seoul was again at the forefront of the action, ending in positive territory after wild swings that saw it drop as much as five percent at one point.

SK hynix ended up more than three percent, the day after a 15 percent collapse. Its New York-listed shares -- which soared more than 13 percent on their debut on Friday -- plunged more than nine percent on Monday. Rival Samsung was up 3.3 percent.

Tokyo, Hong Kong, Shanghai, Singapore, Manila and Jakarta were also up, though Wellington, Taipei, Mumbai and Bangkok fell.

London, Paris and Frankfurt opened lower.

Investors are looking ahead to a big week, with earnings season about to kick off, Fed boss Kevin Warsh due to testify in Congress and US inflation data set to be released.

Meanwhile, Fed governor Christopher Waller stoked concerns over an early interest rate hike as inflation remains elevated.

"If we get another hot reading on core inflation this week, then the (rate-setting committee) will need to consider tightening monetary policy in the near term," he said on Monday.

- Key figures around 0715 GMT -

West Texas Intermediate: UP 2.6 percent at $80.15 a barrel

Brent North Sea Crude: UP 2.4 percent at $85.37 a barrel

Tokyo - Nikkei 225: UP 0.7 percent at 67,743.50 (close)

Seoul - Kospi: UP 0.7 percent at 6,856.83 (close)

Hong Kong - Hang Seng Index: UP 0.6 percent at 24,352.92

Shanghai - Composite: UP 1.4 percent at 3,967.13 (close)

London - FTSE 100: DOWN 0.3 percent at 10,464.94

Euro/dollar: UP at $1.1389 from $1.1384 on Monday

Pound/dollar: UP at $1.3358 from $1.3353

Dollar/yen: DOWN at 162.34 yen from 162.43 yen

Euro/pound: UP at 85.27 pence from 85.25 pence

New York - Dow: DOWN 0.3 percent at 52,498.64 (close)

D.Schneider--BTB