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Stocks rebound and Oil slumps despite further conflict

Investors have rapidly recovered their optimism despite the continued Middle East conflict, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

Investors shrug off Middle East worries

Friday’s outbreak of volatility has given way to a rebound in risk appetite, as investors breathe a sigh of relief that the Middle East conflict now underway remains contained. This might seem like excessive optimism, given the potential for the war to spiral into a new and much more dangerous phase. The sigh of relief uttered by equities was buttressed by reports that Tehran was seeking an end to hostilities, a sign perhaps that Israel’s ‘shock and awe’ campaign has had real impact in Iran’s corridors of power.

Oil prices reverse course

WTI slipped back below $70 in afternoon trading as tensions eased across markets. Unpleasant as it is to watch two sides trade missiles on a sustained basis, so long as the Straits of Hormuz remain quiescent it is hard to envisage a scenario where Friday’s gains can be sustained.

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