Oil prices rallied on Monday after Israel Prime Minister Benjamin Netanyahu said Iran had lied about pursuing nuclear weapons after signing a 2015 deal with global powers, while global stock indexes dipped with the S&P 500 led down by losses in technology.
Mr. Netanyahu said Iran had continued to preserve and expand its nuclear weapons knowledge after the deal.
U.S. President Donald Trump has until May 12 to decide whether to restore sanctions on Iran that were lifted after the 2015 agreement over its nuclear program.
Prices of the Brent June contract, which expires Monday, gained 53 cents to settle at $75.17 a barrel. Prices for the more actively traded Brent July contact gained 90 cents to settle at $74.69
U.S. West Texas Intermediate (WTI) futures were up 47 cents on the day to settle at $68.57 a barrel.
Earlier in the session, both benchmarks had been down about 1 per cent. Both started to gain after Netanyahu said he would soon have an announcement regarding Iran.
“Oil reacted very severely” to Netanyahu’s announcement, said Phil Flynn, analyst at Price Futures Group in Chicago.
MSCI’s all-country index of global equities shed 0.15 per cent,
“The immediate worry would be that the Trump administration ditches the Iran deal, causing oil prices to go up... but the bigger (issue) is - would it lead to a larger confrontation militarily in the Mideast,” said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Sarasota, Fla.
Canada’s main stock index fell on Monday, weighed by declines for the financial and materials groups, as the market reopened after an outage halted trading for several hours on Friday afternoon.
The Toronto Stock Exchange’s S&P/TSX composite index unofficially closed down 61.05 points, or 0.39 per cent, at 15,607.88. Seven of the index’s 10 main groups ended lower.
The shutdown was only the second to hit TMX in a decade, but it could potentially encourage investors to explore alternative trading channels, fund managers and traders said.
“It was truly an unprecedented event,” TMX Chief Executive Lou Eccleston told Reuters in an interview on Monday.
“We understand exactly what happened, so there’s no mystery to that,” he said. “We’ve got everything in place, including additional monitoring.”
Mr. Eccleston did not identify the maker of the defective hardware, saying only that TMX was working closely with the company to prevent anything like what happened on Friday from recurring.
Trading resumed on Monday at 9:30 a.m. ET after the outage abruptly ended Friday’s session more than an hour before the official close.
In the U.S. equity market, top tech names including Microsoft Corp were among the biggest weights on the S&P 500.
The Dow Jones Industrial Average fell 147.49 points, or 0.61 perc ent, to 24,163.7, the S&P 500 lost 21.83 points, or 0.82 per cent, to 2,648.08 and the Nasdaq Composite dropped 53.53 points, or 0.75 per cent, to 7,066.27.
Earnings and deal news provided some support. Starting off another busy week for first-quarter earnings, McDonald Corp’s reported a better-than-expected rise in sales and its shares jumped 5.8 per cent. Apple Inc is set to report on Tuesday.
Reports of big M&A deals included U.S.-based Marathon Petroleum Corp’s agreement to buy Andeavor and a tie-up between British supermarket chains Sainsbury’s and Walmart Inc’s ASDA.
“The market doesn’t have a lot of upside momentum going. It rallies for a day or two but it just doesn’t follow through, and that’s been the case since the January-February correction,” Bittles said.
The pan-European FTSEurofirst 300 index rose 0.21 per cent. The MSCI global stock index was on track for a gain for April, its first positive month since January.
Friday’s seemingly successful summit between the leaders of North and South Korean added to positive market sentiment.
In the U.S. bond market, the U.S. Treasury yield curve flattened for a third straight session after U.S. economic data missed expectations.
The yield gap between U.S. 5-year notes and U.S. 30-year bonds narrowed to 27.20 basis points, the lowest spread in more than six years.
Data showed U.S. personal income rose just 0.3 per cent in March, compared with expectations of 0.4 pe rcent.
Benchmark 10-year Treasury notes last rose 4/32 in price to yield 2.9438 per cent, from 2.957 per cent late on Friday.
Weaker-than-expected German data hurt the euro against the U.S. dollar.
German monthly retail sales unexpectedly dropped in March, dampening cheer around a consumer-led upswing in Europe’s biggest economy. Regional data showed annual inflation in four German states steady in April.
The dollar index rose 0.27 per cent, with the euro down 0.35 per cent to $1.2086.
The Federal Reserve is also due to meet this week, and while no rate hike in benchmark U.S. interest rates is expected, investors will look for clues on the future pace of increases.
Reuters