Friday, 03 December 2021 12:46 GMT

European stocks fall oil spikes on Saudi tensions

(MENAFN- Gulf Times) Europe's stock markets retreated yesterday on worries over simmering Middle East tensions, which are centred on Saudi Arabia and have catapulted oil prices to two-year peaks.
Wall Street opened higher, building on closing records on Monday, but with little economic news scheduled to provide any firm direction, it turned lower in morning trading.
Crude jumped higher this week on Saudi Arabia's sweeping crackdown on princes and ministers, with billionaire tycoon Alwaleed bin Talal arrested on corruption allegations.
Oil was boosted further as geopolitical tensions surged between Riyadh and Tehran, sparking fears of a conflict that could disrupt supplies from two major producers.
Brent oil struck $64.65 per barrel — the highest since June 2015.
New York crude on Monday hit $58.44, also high since mid-2015. Prices later pulled back as profit-taking took hold.
'Crude oil is back in the news today, with discussions over a potential production freeze being set against increased tensions in the Middle East, said market analyst Joshua Mahony at online trading firm IG.
'A wide-ranging corruption crackdown in Saudi Arabia, coupled with increased conflict with Iran, has added to the instability in the world's biggest crude producer, he added.
Rising oil prices tend to support the energy sector and in turn boost world stock markets.
However, the lingering geopolitical uncertainty has cast a pall over Europe's equity markets, dealers said.
Mahoney said 'European markets are seeing widespread selling towards the end of the day, with the FTSE 100 also dropping despite a drop in the pound. The FTSE 100 dropped 0.7% at 7,513.11 points, Frankfurt's DAX 30 slipped 0.7% at 13,379.27 points, Paris' CAC 40 closed 0.5% down at 5,480.64 points, while the EURO STOXX 50 ended 0.6% down at 3,661.73 points yesterday.
On the upside, Asian markets climbed yesterday, with Tokyo and Sydney breaking through historic ceilings thanks to strong corporate earnings and a positive global growth outlook.
Japan's Nikkei closed at its highest level since January 1992, and Sydney's S & P/ASX 200 broke above the psychologically important 6,000 points barrier for the first time since the global financial crisis.
The upward trend tracked overnight records on Wall Street, where US stocks hit fresh highs for the second straight day amid a tech-sector mega-merger, buoyant oil prices, solid economic data and a series of strong earnings reports.
Asia investors appear to have shrugged off nervousness over tensions on the Korean peninsula, with US President Donald Trump visiting Seoul.
Trump arrived yesterday for a two-day visit to South Korea, which he had previously accused of appeasing the North.
There had been fears that Trump's rhetoric or mere presence close to North Korea would raise tensions with Pyongyang or trigger further weapons tests by the nuclear-armed regime.


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