dailynewsnblog
By Elizabeth Howcroft
LONDON, March 25 (Reuters) – European stock indexes rose and oil prices were down on the day on Wednesday, after markets got a boost from reports that the U.S. is seeking a month-long ceasefire with Iran, even though Iran rejected the idea of negotiations.
U.S. President Donald Trump told reporters on Tuesday that the U.S. was making progress in negotiating an end to the war, raising hopes that oil could start being exported from the Persian Gulf again. Traders were cheered by reports of the ceasefire proposal and that the U.S. had sent Iran a 15-point plan for discussion.
Iran denied that direct talks had taken place and an Iranian military spokesman said the United States is negotiating with itself, according to state media.
Still, markets took a positive turn, making modest gains during Asian trading.
European stock indexes rose, with the STOXX 600 up 1.4% on the day at 1036 GMT – a rebound which did little to counter its overall decline so far in March, leaving it down 7.3% on the month. London’s FTSE 100 was up 1.1% on the day.
“The mood is on the positive side,” said Amelie Derambure, senior multi-asset manager at Amundi. “(The) market is trading now the idea that peace talks or a ceasefire could be on the way.”
Derambure said that traders were positioning themselves to avoid missing out on a possible “relief rally”, when markets rise on positive news, although she added that more convincing news will be needed for the move to be sustained.
Some analysts cautioned against expecting the war to end soon.
“It is probably too early to expect any big drop in energy prices or a much softer dollar this week,” ING’s global head of markets Chris Turner wrote in a research note.
OIL EASES, BOND YIELDS FALL
Oil prices, which have risen sharply since the U.S.-Israeli war on Iran began, eased slightly, with Brent crude futures down 5.2% at $99.01 a barrel, and U.S. West Texas Intermediate crude futures down 5.1% at $87.62 a barrel.
Iran has said that “non-hostile vessels” may cross the Strait of Hormuz if they coordinate with Iranian authorities, but the waterway, which typically carries about one-fifth of the world’s gas and crude supply, remains effectively closed.
European government bond yields fell, in a move led by Italian bonds, which had been particularly hard hit since the war started due to Italy’s dependence on fossil fuel imports.
The benchmark 10-year German yield was at 2.9724%. The euro was down by 0.1% at $1.1598.
