Precise Investors Editorial Team
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1%
Asian stocks rose while oil prices dropped on Tuesday as the U.S. said it continued to engage with Tehran to make a deal even as it attempted to blocked Iran’s ports after the collapse of peace talks over the weekend.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1% in early Asia trade, while Nikkei and KOSPI added more than 2% each.
Markets are trading hope, not resolution, said Charu Chanana, Saxo’s chief investment strategist.
The failed weekend talks did not produce a deal, but they also did not close the door on diplomacy, and that is enough for equities to keep pushing higher for now, Chanana said.
U.S. meanwhile attempted a blockade of Iran’s ports.
The U.S. has actually played that trump card. To me it’s important because they forced the onus back on Iran to open the Strait without the need to put those boots on the ground, said Tony Sycamore, a market analyst at IG.
It’s now forced the Iranians back to the drawing board, he added.
Oil prices slipped as expectations for a resolution outweighed concerns over supply disruptions, leaving Brent crude futures down 2.7% at $96.66 a barrel. U.S. crude futures dropped 3% to $96.13 per barrel.
The dollar dropped to a 1-1/2-month low of 98.328 against a range of currencies on Tuesday, as buoyant risk sentiment dampened demand for the currency.
That left the euro trading 0.05% higher at $1.1764 while sterling rose to a more than six-week high of $1.3514.
Nasdaq futures advanced 0.13% while S&P 500 futures held steady, following an overnight rally on U.S. stock market, while EUROSTOXX 50 futures gained 0.63% and DAX futures added 0.77%.
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