Volkswacht Bodensee - Equities rise on oil easing, with focus on Iran war and central banks

As the US-Israel war on Iran entered its third week, Wall Street and most European stock markets climbed after Asian stocks mainly dipped.

International benchmark Brent North Sea crude dropped back 2.8 percent to $100.21, while the main US contract West Texas Intermediate fell 5.3 percent to $93.50.

The price falls came after a Pakistani oil tanker became the first non-Iranian tanker to transit the Strait of Hormuz with its automatic transponder system activated, according to monitor Marine Traffic.

But attacks on Middle Eastern oil facilities continued, with drones hitting major oil fields in the United Arab Emirates and Iraq on Monday.

The head of the International Energy Agency, Fatih Birol, said member countries could unlock more oil from strategic stocks "if needed."

IEA member countries already agreed last week to make their biggest-ever release of 400 million barrels.

Trump has called for allies in Europe and elsewhere to help reopen the vital shipping lane that Iran has effectively closed, but on Monday there was only a lukewarm response to the US leader.

Chancellor Friedrich Merz said the war in the Middle East started by US-Israeli strikes on Iran was "not a matter for NATO" and Germany would not be taking part in it.

The United Kingdom, Spain, Poland, Greece and Sweden all distanced themselves from calls for military involvement.

Oil prices were "certainly the main driver today for stocks because with lower oil prices you also got lower bond yields and that combination offers a nice start for buy-the-dip interest," said Patrick O'Hare of Briefing.com.

This week will see several central banks, including the US Federal Reserve and the European Central Bank, release rate decisions, which O'Hare said had investors in a wait-and-see mood.

"Markets are going to hear a lot about how these policymakers are thinking about this current situation, its effect on inflation and their potential policy posture," he said.

"We will probably have a lot of central banks sounding reluctant to cut rates, so the markets will have to dial back with some rate-cut hopes for this year."

In Asia, Tokyo and Shanghai closed lower, while Hong Kong rose.

During Asia trading hours, crude had climbed further above $100 a barrel after attacks on oil infrastructure on the UAE's east coast and strikes on Iran's Kharg Island.

Iran's Foreign Minister Abbas Araghchi told CBS his country was not interested in talks with Washington, but was ready to speak to countries about safe passage through the Strait of Hormuz.

More strikes occurred Monday, with Saudi Arabia saying it had intercepted over 60 drones since midnight, while flights were temporarily suspended at Dubai's airport after a "drone-related incident" sparked a fire nearby.

Tech stocks led the advance on Wall Street, with Nvidia climbing 1.7 percent after it said it expects to make at least $1 trillion in AI chip revenue through the end of 2027.

- Key figures at around 2000 GMT -

West Texas Intermediate: DOWN 5.3 percent at $93.50 per barrel

Brent North Sea Crude: DOWN 2.8 percent at $100.21 per barrel

New York - Dow: UP 0.8 percent at 46,946.41 points (close)

New York - S&P 500: UP 1.0 percent at 6,699.38 (close)

New York - Nasdaq Composite: UP 1.2 percent at 22,374.18 (close)

London - FTSE 100: UP 0.6 percent at 10,317.69 (close)

Paris - CAC 40: UP 0.3 percent at 7,935.97 (close)

Frankfurt - DAX: UP 0.5 percent at 23,564.01 (close)

Tokyo - Nikkei 225: DOWN 0.1 percent at 53,751.15 (close)

Hong Kong - Hang Seng Index: UP 1.5 percent at 25,834.02 (close)

Shanghai - Composite: DOWN 0.3 percent at 4,084.79 (close)

Euro/dollar: UP at $1.1510 from $1.1416 on Friday

Pound/dollar: UP at $1.3327 from $1.3223

Dollar/yen: DOWN at 159.14 yen from 159.74 yen

Euro/pound: UP at 86.36 pence from 86.33 pence

burs-aha/bys/dw

L.Meier--VB