Asian stocks fluctuate as oil rises amid stalled Iran war talks

KUALA LUMPUR: Asian equities traded unevenly on Wednesday, while oil prices moved higher as efforts to end the Iran war appeared to have stalled and there was no sign of the Strait of Hormuz reopening.

The White House has said Donald Trump and his team were reviewing Tehran’s latest proposal to restore shipping through the strategic waterway. However, CNN and the Wall Street Journal reported that the US president remained doubtful about the offer.

Iran submitted a plan this week under which it would loosen its hold over the route, while Washington would remove its retaliatory blockade on Iranian ports as negotiations continued, including talks related to Tehran’s nuclear programme.

US Secretary of State Marco Rubio said Iran’s proposal was better than what we thought they were going to submit, but added that any final agreement had to be one that definitively prevents them from sprinting towards a nuclear weapon.

Iranian defence ministry spokesman Reza Talaei-Nik said Washington must abandon its illegal and irrational demands, adding that the United States was no longer in a position to dictate its policy to independent nations.

Qatar warned that the situation could turn into a frozen conflict if no lasting settlement is reached.

Concerns over the lack of progress in the peace effort have supported crude prices for more than a week. Sentiment was also weighed down by Trump’s decision to cancel his envoys’ planned trip for peace talks in Pakistan last weekend.

Brent crude remained above the level seen before the two sides announced a ceasefire at the start of April, trading around $112 a barrel, while West Texas Intermediate crossed $100 on Tuesday for the first time in two weeks. Both benchmarks were slightly higher on Wednesday.

There was little significant market reaction after the United Arab Emirates decided on Friday to leave the OPEC and OPEC+ oil groupings, describing the move as strategic.

At the same time, CNN cited people familiar with the mediation as saying the two sides were not as far apart as public positions suggested. Intensive diplomacy was continuing and discussions were centred on a phased arrangement, with the first stage aimed at restoring the pre-war situation and reopening the Strait. Iran’s nuclear programme would be addressed later.

Markets and key indicators

Stock markets across Asia were mixed. Hong Kong, Shanghai, Jakarta and Manila advanced, while Sydney, Singapore, Seoul and Taipei declined. Tokyo’s Nikkei 225 was closed for a holiday.

Investors took a subdued lead from Wall Street, where the Nasdaq led losses in a technology selloff after the Wall Street Journal reported that OpenAI had fallen short of targets for users and revenue. Markets are also preparing for earnings reports due this week from Amazon, Google, Meta and Microsoft.

Investors were also watching the US Federal Reserve, which was due to wrap up a two-day meeting later in the day, with attention on its outlook for inflation and interest rates as energy prices climb.

Among key figures, West Texas Intermediate was up 0.7 percent at $100.62 a barrel, while Brent North Sea Crude rose 0.6 percent to $111.93 a barrel. Hong Kong’s Hang Seng Index gained 1.1 percent to 25,951.05 and Shanghai’s Composite Index added 0.2 percent to 4,084.68.

In currency markets, the euro rose to $1.1715 from $1.1712 on Tuesday, the pound strengthened to $1.3522 from $1.3515, and the dollar slipped to 159.60 yen from 159.64 yen. The euro edged up to 86.66 pence from 86.64 pence.

On Tuesday, New York’s Dow closed up 0.1 percent at 49,141.93, while London’s FTSE 100 also finished 0.1 percent higher at 10,332.79.