Losses resume across indices
|Yesterday's bounce has turned to dust, while oil prices are heading higher again, says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.
Stock markets struggle on thin diet of headlines
While images of war continue to roll across screens around the globe, and Iranian missiles and drones attack other countries, markets have little upon which to base a sustained rally. The president’s promise to escort ships has failed to support a bounce, given the difficulties which the US Navy faced in trying to defeat the less well-armed Houthis, and while some headlines suggest Iran has asked for negotiations, both sides continue to hurl ordnance at one another. Until this calms down, investors will continue to take the risk-off approach.
Oil prices probe a move above Tuesday’s highs
Just as they are selling the rallies in stocks, traders are buying the dips in oil. An effective closure of Hormuz continues to be the most effective argument for oil gains that oil bulls can hope for. The higher oil goes, the greater the fear that economies worldwide face the much-feared ‘second wave’ of inflation, writing off chances of more rate cuts in the near future.
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