Investors returned to major markets as Middle Eastern geopolitical tensions subsided. Wall Street, Europe, and Asian benchmarks all closed in positive territory.
Wall Street’s benchmarks up after Middle East conflict begins to retreat
The US’ major benchmarks all gained on Monday after reports suggested Iran was seeking an end to hostilities with Israel. Tehran called for an immediate ceasefire, offering flexibility in its nuclear negotiations. As a result, the DOW gained +0.7%, the S&P 500 rose +0.8%, and the NASDAQ increased +1.4%. Focus now shifts to the Federal Reserve’s rate-setting meeting on Wednesday. Meta increased +2.9% after announcing plans to introduce more updates to WhatsApp over the coming months. UPS and FedEx rose +1.0% after the Trump organisation launched Trump Mobile—a self-branded mobile network—and named the two logistics firms as delivery partners. The two-year Treasury yield remained flat at 3.96%, while the ten-year note rose +2 bp to 4.45%.
Europe and London take modest gains
London’s FTSE 100 and the pan-European Stoxx 600 rose +0.3% and +0.4% respectively. Monday’s rebound was driven by easing concerns over geopolitical tensions in the Middle East. Gains were tempered by investor caution ahead of the upcoming inflation update, with markets pricing in that the Bank of England will hold interest rates steady. Entain surged +13.6% after raising its annual guidance for the BetMGM business. Kering rose +10.0% following reports that it is close to appointing Renault’s Luca de Meo as its new CEO. Renault fell -6.5% after Nissan announced plans to reduce its stake in the French carmaker.
Australia flat despite energy sector revival, Asian benchmarks up
The ASX 200 remained flat over the session despite strength in the energy sector. The sector was lifted by a spike in oil prices and a A$29 billion takeover bid for Santos. It jumped +5.2%, bringing its two-day gain to 10.0%. Brent crude spiked +12.0% over the week as tensions escalated between Israel and Iran. Santos rose +10.9% after Abu Dhabi National Oil Co offered A$8.89 per share—more than A$1 above its current market price. Investors are concerned that the Foreign Investment Review Board may block the deal. The NZX 50 added +1.1%, with Tourism Holdings (+57.5%) leading gains following a takeover bid from private equity firm BGH Capital. Korea’s Kospi gained +1.8% to lead Asian benchmarks, followed by Japan’s Nikkei 225, which rose +1.3%. Hong Kong’s Hang Seng increased +0.7%, while China’s CSI 300 and Shanghai Composite rose +0.3% and +0.4% respectively.
Commodities take a breather
WTI crude fell -2.2% to US$71.38/bbl, gold lost -1.4% to US$3,384.87/oz, and iron ore dropped -0.1% to US$95.38/MT.
NZ Headlines
Honey producer Comvita warned that ‘additional action’ would be needed to reduce its debt amid ongoing discussions with lenders over relief from debt covenants. In a statement to the NZX yesterday, Comvita said an inventory sell-down had helped reduce net debt to NZ$63m this month, down from NZ$81.6m in December.
Tourism Holdings shares surged +57.5% after it received an unsolicited, non-binding offer from a consortium led by Australian private equity firm BGH Capital yesterday morning. This was well above Friday’s NZ$1.46 close and surpassed the annual high of NZ$2.22 recorded last July.
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