In the UK, the premier index posted marginal gains, helped along by a slew of broker upgrades to British Airways owner International Consolidated Airlines despite a mixed update on Friday, well-received half-year numbers and gains for BP (LON:) and Shell (LON:) as they tracked the oil price higher. A large technical drop for F&C Investment Trust was explained simply by a 4 for 1 share split becoming effective, with the underlying position unchanged for shareholders.
The has been something of a beacon of light throughout the conflict for the most part, underpinned by the stability and defensive qualities of many of its constituents. The latest progress takes the index to a gain of 3.5% in the year so far, with international investors seemingly positioned to turn to the index in more volatile times such as these.
US markets are running a parallel course to the oil price, with the main indices continuing to fire ahead despite the ongoing lack of progress between the US and Iran on a permanent ceasefire.
A strong quarterly earnings season and the resumption of AI euphoria have helped brush aside the inflationary concerns of an oil price that has jumped another 4% following a weekend of limited progress between the warring parties. It was reported that the US President rejected Iran’s latest proposal as “totally unacceptable”, in turn elongating the logjam in the Strait of Hormuz and extending the likelihood of higher for longer oil prices, with all the inflationary impact that entails.
Given its separate relationship with Iran, hopes now turn to the meeting between the US and Chinese Presidents later in the week, where discussions will include, inter alia, the situation in the Middle East. There seems to be a glimmer of optimism that the Chinese authorities may be able to bring some pressure to bear on Iran, although the extent of their influence remains unclear.
In the meantime, the main indices rose once more, with sentiment boosted by a report which declared that 115000 jobs had been added in April, as opposed to the 55000 estimate, with the remaining unchanged at 4.3% as expected. The next test will come in the form of the latest readings, as both the consumer and producer price indices readings are released.
Despite edging marginally lower following another weekend of stalemate, the market remains in rude health. In the year to date, the has added 3.2%, while the and are ahead by 8.1% and 12.9%, respectively, each hitting record closing highs at the end of last week.
Asian markets were unsurprisingly mixed overnight after the weekend, although the tech trade has been a source of major advances in that region also, with the and having risen by around 10% and 30%, respectively over the last month, with the likes of Samsung Electronics and fellow chipmaker SK Hynix at the vanguard. There were limited gains in the Shanghai Composite following reports of better-than-expected export figures, even though factory gate prices rose by 2.8% in April, showing some early signs of conflict strain.