FRAGILE SENTIMENT
Stocks fell across the region, with Tokyo, which hit a record high on Thursday, among the biggest losers, with Seoul, Hong Kong, Shanghai, Sydney, Wellington, Manila and Singapore also well down.
Taiwan’s TAIEX fell. On Thursday, it hit a market capitalisation of US$4.14 trillion to top the UK’s market capitalisation and become the world’s seventh biggest, according to Bloomberg data.
London edged lower, Paris edged up and Frankfurt was flat.
That came even after the S&P 500 and Nasdaq enjoyed record closes on Wall Street.
Analysts said traders were heading into the weekend positioning for any surprise developments.
Oil prices dropped, a day after sharp gains, though both main contracts remain just below US$100 a barrel.
There was some support from a 10-day ceasefire agreed between Israel and Lebanon that took effect at 9pm GMT (5am, Friday, Singapore time) on Thursday.
Tel Aviv has sent troops into its northern neighbour since militant group Hezbollah launched rocket attacks in support of Iran last month.
Hezbollah has not officially said if it will recognise the ceasefire but one of its lawmakers told AFP on Thursday that the group would respect it if Israeli attacks on its militants stopped.
Israeli Prime Minister Benjamin Netanyahu said the 10-day ceasefire with Lebanon offered an opportunity for a “historic peace agreement”, but insisted that the disarmament of militant group Hezbollah remained a precondition.
Trump said he will invite the countries’ leaders to the White House.
“While investors remain buoyed by talks of an extension in the US-Iran ceasefire and an announced Israel-Lebanon 10-day ceasefire, risk sentiment remains fragile as an immediate deal remains unlikely given that the countries remain far apart on key issues,” wrote National Australia Bank’s Skye Masters.
Fiona Cincotta of City Index, said: “While risks remain – particularly around disruptions to key shipping routes such as the Strait of Hormuz – markets are increasingly pricing in a scenario where oil prices have peaked unless tensions re-escalate.”
But she warned that “the outlook remains fragile. A breakdown in diplomacy or renewed escalation could quickly reverse recent gains”.
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