Stocks surged and oil prices dropped on Wednesday after a report that the United States and Iran are closing in on an agreement to end the war in the Gulf, while momentum in AI-driven trades accelerated.
Brent crude, the global benchmark, plunged to just below $100 per barrel, its lowest in two weeks, given the importance of oil passing through the Strait of Hormuz. Brent was last trading at $102, down 7 per cent, in the early evening.
Europe’s Stoxx 600 index extended its gains and was up over 2 per cent after climbing 0.7 pr cent a day earlier.
“A pretty punchy move on the back of those stories, almost as if the market has shifted into ‘buy everything’ mode,” said Michael Brown, senior research strategist at Pepperstone.
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“It’s difficult to say how close to a deal we might be,” he said.
Dublin
Dublin’s Iseq jumped 4 per cent (more than 500 points) as the possibility of a peace deal in the Middle East loomed. Unsurprisingly travel and leisure stocks were among the biggest gainers. Ryanair was the single biggest mover, rising 10 per cent to close the session at €24.24. Airlines are more at risk from a prolonged uptick in fuel prices.
AIB and Bank of Ireland were also up, 2.2 per cent and 3.5 per cent respectively, as financials across Europe rose on the back of positive investor sentiment.
Home builder Cairn was another stock on the move, rising 5 per cent. Last week it warned build-cost inflation had doubled in recent months.
Europe
Europe’s Stoxx 600 jumped over 2 per cent on Wednesday in a broad-based rally as reports of a possible peace deal between Washington and Tehran boosted risk appetite and sent oil prices sharply lower, while upbeat company earnings added to the optimism.
The pan-European Stoxx 600 closed up 2.2 per cent at 623.25 points, to its strongest level since April 17th. Defence shares added 4.7 per cent. Italy’s Leonardo gained 5 per cent after reporting higher first-quarter earnings, while Norway’s Kongsberg also jumped 5 per cent after its order intake more than doubled for the quarter. Demant surged 13.3 per cent and marked its biggest one-day gain since October 2008 after the Danish hearing aids maker beat quarterly sales growth estimates.
Novo Nordisk gained 2.5 per cent after the Wegovy-maker raised its full-year outlook and beat first-quarter profit estimates. BMW rose 5.4 per cent after the German carmaker maintained its full-year outlook despite posting a steep drop in its quarterly pretax profit.
London
The main UK indexes jumped more than 2 per cent on Wednesday, aided by hopes of a US-Iran deal to end the war that has lifted energy prices and stoked concerns of inflation.
The blue-chip FTSE 100 index closed 2.2 per cent higher at 10,438.7 points, while the midcap FTSE 250 climbed 1.7 per cent, touching its highest level in two weeks.
Guinness maker Diageo jumped 6.4 per cent after the drinks giant beat third-quarter sales forecasts.
Next rose 4.4 per cent after the clothing retailer said it would mitigate cost increases linked to the Iran war with modest price rises in some overseas markets, as it posted better-than-expected first-quarter sales.
New York
The S&P 500 and the Nasdaq hit record highs on Wednesday, buoyed by signs of a resolution in the Middle East conflict, while strong earnings from Advanced Micro Devices sparked a rally in chipmakers.
Advanced Micro Devices’ shares rose nearly 17 per cent to a record high after the company forecast second-quarter revenue above expectations on robust demand for its data-centre chips.
Shares of rival Intel jumped 2.4 per cent, while a broader gauge of US chipmakers climbed 3.5 per cent to a fresh peak on continued optimism around AI demand.
Global stocks surged and oil prices slumped following reports that the United States and Iran were closing in on an agreement for a one-page memorandum to end the war in the Gulf region. Iran said it was reviewing a new US proposal.
In its current form, the memorandum would declare an end to the conflict and the start of a 30-day period of negotiations on a detailed agreement to open the Strait of Hormuz, limit Iran’s nuclear program and lift US sanctions, Axios reported. – Additional reporting by Reuters/Bloomberg
