Volkswacht Bodensee - Stocks climb, oil steadies on guarded optimism over Iran war ceasefire

Tuesday's announcement of a two-week halt to fighting between the United States and Iran that would see the key Strait of Hormuz reopened sparked a wave of euphoria across markets.

But hopes for an end to the crisis have been hit by squabbles over the agreement and the future of the waterway through which about a fifth of the world's oil and gas passes.

"The ceasefire agreement announced earlier this week has felt fragile," noted AJ Bell’s head of markets Dan Coatsworth.

"With talks between Tehran and Washington set to get underway on Saturday, investors could be in for a fretful weekend as they wait for indications of whether a path to lasting peace is possible.

"Ahead of this, investors may well be tempted to hedge their bets," Coatsworth added.

Following gains across Asia, Europe's main equity indices showed solid gains in early afternoon trading. On Thursday, stocks jumped late in the day in New York on news that Israel and Lebanon planned to hold talks next week in Washington.

Oil prices were little changed with the main traded contracts just below $100 a barrel.

Even with this week's rebound, stocks remain lower and oil prices significantly higher than before the start of the war.

A cloud of uncertainty hung Friday over the scheduled start of the talks in Pakistan, with no announcement yet on the arrival of negotiators and both sides accusing the other of failing to properly implement the ceasefire.

US President Donald Trump has voiced displeasure at Iran's handling of the strategic Strait of Hormuz, which remains largely blocked to traffic.

Added to the unease, French energy giant TotalEnergies said it had shut down a major refinery in Saudi Arabia after it was damaged during the war.

Japan's Prime Minister Sanae Takaichi said Tokyo planned to release a further 20 days' worth of oil reserves as early as next month.

Tehran has meanwhile reacted angrily to Israeli attacks in Lebanon, insisting that it too falls under the ceasefire agreement -- something Washington disputes.

Ahead of Wall Street reopening, eyes will be on US consumer price inflation data for April.

"We will see how the conflict has impacted" prices in the world's biggest economy, said Kathleen Brooks, research director at XTB.

"Analysts expect a sharp jump to 3.4 percent for headline inflation, up from 2.4 percent for March."

Brooks added that "a higher reading for headline CPI could make it hard for the Federal Reserve to cut rates this year and would suggest a lasting inflationary problem, which could weigh on risk sentiment... and boost the dollar".

- Key figures at around 1115 GMT -

Brent North Sea Crude: FLAT at $95.92 a barrel

West Texas Intermediate: UP 0.1 percent at $97.96 a barrel

London - FTSE 100: UP 0.4 percent at 10,646.39 points

Paris - CAC 40: UP 0.9 percent at 8,317.42

Frankfurt - DAX: UP 0.8 percent at 23,998.02

Tokyo - Nikkei 225: UP 1.8 percent at 56,924.11 (close)

Hong Kong - Hang Seng Index: UP 0.6 percent at 25,893.54 (close)

Shanghai - Composite: UP 0.5 percent at 3,986.22 (close)

New York - Dow Jones: UP 0.6 percent at 48,185.80 (close)

Euro/dollar: UP at $1.1712 from $1.1707 on Thursday

Pound/dollar: DOWN at $1.3435 from $1.3441

Dollar/yen: UP at 159.20 yen from 159.06 yen

Euro/pound: UP at 87.16 pence from 87.09 pence

burs-bcp/gv

T.Ziegler--VB