Investor optimism fades after reports Iran may restrict US and Israeli vessels, reigniting fears over energy supplies, inflation and interest rates……
Global oil prices continued their upward march on Friday, while most major stock markets retreated as renewed uncertainty over the Strait of Hormuz overshadowed earlier optimism that a deal to reopen the vital shipping route was within reach.
Investor sentiment weakened after reports suggested Iran could seek to bar US and Israeli vessels from transiting the strategic waterway under a proposed agreement with Oman, raising fresh concerns about disruptions to global energy supplies.
Financial markets had started the week on a positive note after US President Donald Trump announced that planned military strikes against Iran had been shelved and indicated that negotiations with Tehran were progressing. However, Iranian authorities later denied that any direct talks had taken place.
Tehran also signalled that discussions with Oman over the future management of the Strait of Hormuz were advancing but insisted that the United States would first need to end what it described as its naval blockade of Iranian ports.
Oil prices began recovering on Wednesday before surging by as much as four percent on Thursday following reports by Iran’s Fars News Agency that Tehran was considering restricting access to the waterway for US and Israeli ships as part of any future arrangement with Muscat.
The reports dampened hopes that the Strait of Hormuz—through which roughly one-fifth of the world’s oil and liquefied natural gas supplies pass—would soon return to normal operations.
The renewed uncertainty has also revived concerns over higher energy costs, a potential resurgence in global inflation and the possibility that central banks could keep interest rates elevated for longer.
Both Brent crude and US West Texas Intermediate (WTI) extended their gains during Friday’s trading session.
Stock markets, however, painted a different picture, with investors adopting a more cautious approach. Major indices in Tokyo, Seoul, Sydney, Wellington, Taipei, Bangkok and Mumbai closed lower, while Hong Kong, Shanghai, Singapore and Jakarta recorded modest gains. European markets, including London, Paris and Frankfurt, traded slightly higher in early dealings.
The cautious mood followed a weaker session on Wall Street, where the Dow Jones Industrial Average retreated after three consecutive record closes.
Market analysts said investors are reassessing whether the strong rally seen earlier in the week was justified in light of the latest geopolitical developments.
Attention has also shifted to key US economic data, with investors awaiting the release of the latest employment figures, followed by next week’s consumer inflation report. Both reports are expected to influence the US Federal Reserve’s next decision on interest rates.
Market Snapshot
Nikkei 225 (Tokyo): Down 0.1% to 65,606.71
Hang Seng (Hong Kong): Up 0.5% to 25,668.03
Shanghai Composite: Up 1.0% to 3,940.04
FTSE 100 (London): Up 0.2% to 10,892.16
Currency Markets
Dollar/Yen: 158.45
Euro/Dollar: $1.1522
Pound/Dollar: $1.3450
Euro/Pound: 85.67 pence
Commodities
Brent Crude: Up 0.9% to $83.24 per barrel
West Texas Intermediate (WTI): Up 0.6% to $77.75 per barrel
U.S. Markets
Dow Jones Industrial Average: Down 0.9% to 53,885.10
