dailynewsnblog
Listen to this article
Estimated 3 minutes
The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.
Markets soared overnight and U.S. crude prices plunged 13 per cent after China’s foreign minister on Wednesday called for a comprehensive ceasefire in the Iran war, the latest spark of optimism that the two-month war could end soon.
Futures for the S&P 500 rose one per cent before the opening bell, while futures for the Dow Jones Industrial Average climbed 1.2 per cent. Nasdaq futures jumped 1.7 per cent.
Wang Yi, speaking after meeting with Iranian Foreign Minister Abbas Araghchi, said China was “deeply distressed” by the conflict. Araghchi was visiting Beijing for the first time since the war with the U.S. and Israel started Feb. 28.
China’s close economic and political ties to Tehran give it a unique position of influence. The Trump administration is pressing China to use that relationship to urge Iran to open the Strait of Hormuz.
News that Iranian officials were travelling to China ahead of a summit between U.S. President Donald Trump and Chinese leader Xi Jinping lifted market sentiment.
Oil prices spiralled soon after Wang’s comments, with prices for a barrel of brent crude, the international standard, retreating $12.66 US to $97.21 US a barrel, extending declines that erased big jumps earlier in the week before rising again to hover just over $100 US. The prices still remain well above their roughly $70 US price before the war with Iran began, however.
Sinking oil prices sent energy giants shares sliding overnight, with Chevron, Exxon Mobil and ConocoPhillips all seeing losses of close to five per cent.
The prospect of lower jet fuel prices pushed major U.S. airlines up, with Delta, United and American all gaining more than six per cent in premarket trading.
The Chinese minister’s comments followed an earlier statement by Trump that he was pausing his short-lived U.S. effort to guide stranded commercial vessels out of the Strait of Hormuz in hopes that a deal could be finalized. A shaky ceasefire has been largely holding, despite exchanges of fire during the U.S. push to reopen the strait on Monday.
Iran’s effective closure of the strait, a vital waterway through which major oil and gas supplies, fertilizer and other petroleum products passed before the war, has sent fuel prices skyrocketing, rattled the global economy and put enormous economic pressure on countries, including major powers like China.
Elsewhere, in Europe at midday, France’s CAC 40 added 1.6 per cent, while the Germany DAX rose 1.5 per cent. Britain’s FTSE 100 surged 1.9 per cent.
In Asian trading, South Korea’s Kospi gained 6.5 per cent to 7,384.56, surpassing the 7,000 level for the first time. Samsung Electronics’ stock jumped 14 per cent in a rally driven by expectations of strong growth in artificial intelligence.
Australia’s S&P/ASX 200 gained 1.3 per cent to 8,793.60. Hong Kong’s Hang Seng gained 1.2 per cent, while the Shanghai Composite index rose 1.2 per cent.
With the Strait of Hormuz now doubly blockaded, oil prices fell while markets climbed on Monday, despite an initial shock. CBC senior business correspondent Peter Armstrong explains where the pain is being felt, and how public faith in a solution could be buoying the markets.
