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January 4, 2020

Oil rises seven-month high, Wall Street stocks fall

Top Story

 
January 4, 2020

LONDON: Meanwhile, world oil prices jumped on Friday after the US killed the Iranian general. Brent oil surged 4.5 per cent in the London morning and WTI jumped 4.1 per cent as traders fretted over the dramatic escalation in tensions, although prices dropped back before the European close, reports foreign media. 

Major oil firms sawtheir shares gain ground, BP adding 2.75 per cent to 494.05 pence while Royal Dutch Shell B shares rose 2.13 per cent to 2,306.50 pence.

Also, Wall Street stocks retreated from records early Friday after the US strike killed Iranian commander. About 20 minutes into trading, the Dow Jones Industrial Average stood at 28,661.44, down 0.7 per cent. The broad-based S&P 500 also shed 0.7 per cent to 3,236.58, while the tech-rich Nasdaq Composite Index dropped 0.8 per cent to 9,023.75.

AFP adds: Wall Street stocks retreated from records early Friday after the US strike. About 20 minutes into trading, the Dow Jones Industrial Average stood at 28,661.44, down 0.7 per cent.

The broad-based S&P 500 also shed 0.7 per cent to 3,236.58, while the tech-rich Nasdaq Composite Index dropped 0.8 per cent to 9,023.75. Major indices had closed at records on Thursday, but the US attack and Iran’s threat of reprisal shook the market out of a state of contentment that has produced numerous records in recent weeks.

Patrick O’Hare, analyst at Briefing.com, said “the market has been operating in an overbought condition for some time” and that the Soleimani killing could be a catalyst for a pullback that investors had already been anticipating.

“However, if the market quickly bounces back, it may just invite more speculative excess that could be a setup for a larger downside correction when one actually happens,” O’Hare added. Oil prices rallied on the developments, lifting petroleum-linked companies like Apache and Halliburton, both of which rose more than two percent. But airlines were under pressure with Delta Air Lines, United Airlines and American Airlines all down at least two percent.