Volkswacht Bodensee - Stocks rise, oil prices retreat on hopes for Mideast peace deal

Wall Street's main indices climbed, with both the S&P 500 and the Nasdaq now back at levels from before the US and Israel began bombing Iran on February 28.

European equity markets also rose, although London rose only 0.3 percent as the retreat in oil prices from $100 a barrel weighed on the shares of energy majors BP and Shell.

Asia's leading stock markets closed with sizeable gains, while the dollar, seen as a haven in times of market turmoil, dropped against its main rivals.

The United States said "the ball is in the Iranian court" on ending the Mideast conflict as diplomats accelerated efforts for a new round of peace talks after weekend negotiations failed to produce a deal.

"Stocks saw an upswing while oil prices took a dip following President Donald Trump's suggestion to reopen talks with Iran, sparking optimism for a potential agreement that might alleviate tensions in the Middle East," said Patrick Munnelly, a market strategist at Tickmill Group.

Trump said Iranian representatives had called Washington since a US delegation returned empty-handed from negotiations in Islamabad.

"They'd like to make a deal. Very badly, very badly," Trump told reporters.

At the same time, the US has implemented a naval blockade of Iranian ports at the Strait of Hormuz, through which one-fifth of world oil passes.

Investors are "pricing in victory", said analyst David Morrison at Trade Nation.

He said many believe the end of the conflict is a question of days, weeks or months rather than years.

"Nobody wants to be under-exposed to risk assets, let alone be short, should the war suddenly conclude, or even if the Strait of Hormuz was unblocked," Morrison said.

The International Energy Agency warned Tuesday that demand for crude would likely see in the second quarter this year the biggest slump since the Covid pandemic slammed the global economy in 2020.

Surging prices will force many countries and industries to curb oil use, and "demand destruction will spread as scarcity and higher prices persist", the agency said in its monthly report.

Crude futures have peaked at almost $120 a barrel during the war from around $72 on the conflict's eve.

The benchmark US oil contract, West Texas Intermediate (WTI), fell more than five percent during morning trading in New York to under $94 per barrel.

"Oil prices started to decline as rumors about renewed diplomatic efforts between US and Iran emerged," said analysts at DNB Carnegie.

Investors are also keeping an eye on the flood of first-quarter earnings being released this week and next for signs of how the Mideast war is impacting corporate bottom lines.

French luxury conglomerate LVMH reported Monday that sales fell six percent in the first three months of the year, saying the war in the Middle East depressed business in the region.

Its shares spent most of the day in the red, but finished the day with a small gain.

Large banks JPMorgan Chase, Citigroup and Wells Fargo all reported higher quarterly profits, pointing to continued resilience among US consumers despite increased geopolitical uncertainty.

Shares in JPMorgan Chase and Wells Fargo fell however.

- Key figures at 1530 GMT -

Brent North Sea Crude: DOWN 3.1 percent at $96.23 a barrel

West Texas Intermediate: DOWN 5.5 percent at $93.67 a barrel

New York - Dow Jones: UP 0.7 percent at 48,531.83 points

New York - S&P 500: UP 0.9 percent at 6,948.17

New York - Nasdaq Composite: UP 0.7 percent at 23,509.13

London - FTSE 100: 0.3 percent at 10,609.06 (close)

Paris - CAC 40: UP 1.1 percent at 8,327.86 (close)

Frankfurt - DAX: UP 1.3 percent at 24,044.22 (close)

Tokyo - Nikkei 225: UP 2.4 percent at 57,877.39 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 25,872.32 (close)

Shanghai - Composite: UP 1.0 percent at 4,026.63 (close)

Euro/dollar: UP at $1.1802 from $1.1761 on Monday

Pound/dollar: UP at $1.3571 from $1.3507

Dollar/yen: DOWN at 158.80 yen from 159.41 yen

Euro/pound: DOWN at 86.97 pence from 87.08 pence

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