Global stocks, oil rise on US pressure to snub Iranian crude

NEW YORK: Rising shares of energy and technology companies helped global stock markets regain ground on Tuesday, a day after a mounting trade fight pummeled equities, while oil surged more than two per cent as Washington lobbied against Iranian crude imports.

Wall Street closed higher, aided in part by energy shares that soared after a senior US State Department official said Washington was telling its allies to stop importing Iranian crude oil.

“Yes, we are asking them to go to zero,” the official said when asked if the United States was pushing allies, including China and India, to cut oil imports to zero by November.

The Dow Jones Industrial Average rose 30.31 points, or 0.12 per cent, to 24,283.11, the S&P 500 gained 5.99 points, or 0.22 percent, to 2,723.06 and the Nasdaq Composite added 29.62 points, or 0.39 per cent, to 7,561.63.

Tech stocks rebounded from a sharp sell-off on Monday, after US government officials said plans were in the works to block firms with at least 25 per cent Chinese ownership from buying US companies with “industrially significant technology.”

Apple Inc, which rose 1.2 per cent, snapped a three-day losing streak.

Stocks were also propelled upward by shares of consumer discretionary companies and by General Electric Co, whose shares rose 7.8 per cent after the company said it would spin off its healthcare business and divest its stake in oil-services company Baker Hughes.

A basket of European stocks also got a reprieve. The pan-European FTSEurofirst 300 index rose 0.09 percent and MSCI’s gauge of stocks across the globe gained 0.08 per cent, after Asia had extended a sell-off that wiped US$1.5 trillion off world stocks.

Despite the modest gains, investors remained wary.

“We’re still in a tug-of-war between daily twists and turns of a potential trade war and the reality of a strong underlying US economy,” Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co, said.

Escalating trade tensions between the United States and China, as well as Washington and Europe, had led two benchmark Wall Street indexes on Monday to suffer their biggest losses in more than two months and launched China into bear market territory, with its major stock indexes down 20 per cent from January peaks.

After seeing a surge in buying on Monday, US Treasury debt yields edged higher as concerned lingered that trade tensions could hurt economic growth, though safe-haven buying was capped on anticipation of more interest rate hikes from the Federal Reserve.

Gold hit its lowest in over six months as the selloff in global risk assets eased and it remained under pressure from the prospect that rising U.S. interest rates will further support the dollar.

Oil prices, meanwhile, soared after the US official said the government was pressuring allies to halt Iranian crude imports.

“We’re going to isolate streams of Iranian funding and looking to highlight the totality of Iran’s malign behavior across the region,” the official, speaking on condition of anonymity, told reporters.

Benchmark oil prices jumped over 2 per cent and US crude topped US$70 a barrel for the first time in two months. — Reuters