Oil Prices Rise on Iran Concerns, Stocks Extend Tech-Led Rally

Hong Kong: Oil prices continued their rise on Wednesday as Middle East peace talks faltered, but stocks rose mostly on continued demand for anything AI-related.

Despite Donald Trump’s assurances that the US and Iran are close to ending their three-month-old war and reopening the Strait of Hormuz, crude investors appear complacent as they await solid progress.

Unrest in trading floors has increased this week following reports that contact with Iran had been cut off due to Israeli attacks on Lebanon, which the US president denied on Tuesday.

“Fake News Reports that the Islamic Republic of Iran and the United States stopped talking a few days ago are false and inaccurate,” he wrote on the Truth Social network.

“The talks between us continue continuously, including four days ago, three days ago, two days ago, one day ago and today.”

He added: “No one knows where they will go, but as I said to Iran, ‘It’s time to make a Deal one way or another. You’ve been doing this for 47 years and this can’t be allowed to continue any longer!'”

While Israel continued its attacks on Lebanon, endangering the fragile ceasefire between Washington and Tehran, Iran fired missiles at nearby countries.

The president said he remained optimistic about the deal.

But the US military said on Tuesday that Iran had “successfully defeated” a series of missile and drone attacks in the Gulf and that the country had launched self-defense strikes on Qeshm Island. Centcom also said three attack planes launched by Iran “aimed at civilian marines” were shot down.

Uncertainty about the peace deal increased oil prices by more than one percent; Both main contracts are up around five percent this week.

However, stocks continued their breathtaking rise, driven by the technology sector and demand for artificial intelligence.

Advantest also jumped as Tokyo rose more than two percent, helped by a more than 11 percent rise in chipmaker Tokyo Electron.

Taipei increased by a similar amount, thanks to strong progress by Taiwan Semiconductor Manufacturing Company.

Shanghai, Sydney, Singapore and Manila also rose, while Hong Kong, Wellington and Jakarta declined. Seoul was closed for holidays.

“Equity markets are once again taking their cue from the technology sector rather than geopolitical headlines,” said IG chief market analyst Chris Beauchamp.

“Tensions surrounding Iran have done little to dampen investor appetite, with a series of AI-related announcements providing a more compelling narrative for markets this week.

“This pattern is a familiar one: When Big Tech emerges, broader indices tend to follow.”

He said sentiment was “pegged by a pipeline of AI-focused capital spending that shows no signs of slowing down.”

These gains followed the S&P 500 and Nasdaq to new records on Wall Street; Chipmaker Marvell Technology soared more than 32 percent after Nvidia CEO Jensen Huang hailed it as the next trillion-dollar company.

Adding to the optimism among stock investors was data showing that open interest in the US rose to a 23-month high in April.

The reading comes ahead of Friday’s employment data that will determine whether the Fed will keep its benchmark interest rate steady or potentially raise borrowing costs to combat inflation.

The yen strengthened slightly, approaching 160 points against the dollar, amid speculation that Japanese authorities might step in to support their currency following last month’s intervention.

This comes after the Japanese cabinet approved a $19 billion supplementary budget to support households struggling with rising daily costs due to the Iran war.

– Key figures around 02:30 GMT –

West Texas Intermediate: Up 1.2 percent at $94.86 per barrel

Brent North Sea Crude: up 1.0 percent at $96.97 per barrel

Tokyo – Nikkei 225: up 2.6 percent to 68,452.45 (breakout)

Hong Kong – Hang Seng Index: 25,686.06 points, down 1.4 percent

Shanghai – Composite: up 0.2 percent at 4,084.37

Euro/dollar: fell from $1.1634 to $1.1630 on Tuesday

Pound/dollar: up from $1.3470 to $1.3472

Dollar/yen: decreased from 159.92 yen to 159.85 yen

Euro/pound: dropped from 86.37 pence to 86.34 pence

New York – DOW: 0.5 percent increase at 51,307.79 (closing)

London – FTSE 100: up 0.3 percent at 10,373.51 (closing)