DStv Channel 403 Thursday, 07 November 2024

Oil rises on fresh Middle East fears, equities advance

HONG KONG - Oil rose on Monday on fresh Middle East fears as Joe Biden pledged to retaliate after Iran-backed Huthi rebels killed three US service members in a drone attack, while equities were boosted by China's latest move to support its troubled markets.

The drone strike on a base in Jordan -- which came two days after Yemen's Huthi group struck a vessel in the Red Sea -- ramped up tensions in the region and stoked worries about supplies through the key trade waterway.

Both main crude contracts rose more than one percent in early trade -- hitting levels not seen since November -- before paring the gains slightly.

The development comes as Israel presses on with its war against Hamas, adding to investor concerns about a wider conflagration that brings in Iran and the United States.

Still, the reports did little to dent equity markets in Asia, 

Hong Kong led the way, piling on more than one percent as traders welcomed news that China would stop the lending of certain shares for short selling as officials try to put a floor under the country's battered markets. 

Shanghai edged down on news that a Hong Kong court had issued a winding-up order against Chinese developer Evergrande.

Evergrande's Hong Kong-listed shares collapsed more than 20 percent on the news before they were suspended.

Traders were also awaiting a crucial policy decision by the US Federal Reserve this week and the release of more corporate earnings.

While the Fed meeting is not expected to see any move on interest rates, traders hope to hear some guidance from officials on their plans, with a cut in March currently seen as a toss-up.

There were also gains in Tokyo, Sydney, Seoul, Mumbai, Bangkok, Taipei, Jakarta and Wellington.

Asia's mostly upbeat day followed another record close for the Dow on Wall Street that came after the central bank's preferred inflation gauge indicated prices were being brought under control.

As well as the Fed's meeting, the week also sees a number of other notable events, including the release of figures on US jobs creation and consumer sentiment, and Chinese manufacturing activity.

Amazon, Microsoft and other large technology companies are also due to report their earnings.

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