Volkswacht Bodensee - Oil prices retreat after surge, as stock markets diverge

Brent and key US contract, West Texas Intermediate, declined three percent. Brent had soared seven percent Thursday and WTI more than six percent.

The sizeable jumps had come after Yemen's Houthi rebels struck oil tankers in the Red Sea, opening a new front in the Middle East war.

President Donald Trump meanwhile threatened the rebels with "major military punishment".

Despite the United States launching fresh strikes Friday on Iran, there was relief on markets that some ships were still able to pass through the Bab al-Mandeb strait, a crucial passage into the Red Sea.

"Ships with Saudi crude are still crossing... so for now, it is not a full blockade, reducing a bit the risk of an even tighter oil market," Giovanni Staunovo, a commodities analyst at Swiss bank UBS, told AFP.

Elsewhere, Europe's main stock markets climbed after losses for leading indices across Asia, as traders weighed a new wave of US tariffs.

Data on Friday showed business activity in the eurozone grew for the first time in four months in July.

"July is seeing a welcome revival of economic activity in the eurozone, but a volatile geopolitical environment means it remains to be seen if the good news can last," said S&P chief business economist Chris Williamson.

The eurozone purchasing managers' index (PMI) published by S&P Global, registered a reading of 51.9 this month after June's figure of 50, which indicated zero growth.

Outside the eurozone, UK markets have held up fairly well this week as Andy Burnham took over from Keir Starmer as prime minister.

In foreign exchange trading Friday, the dollar fell against main rivals, including the British pound.

Asian stock markets followed a sell-off Thursday on Wall Street as world markets were battered by a perfect storm of the resurgent Middle East war, the spike in oil prices back past $100 and concerns about the artificial intelligence (AI) boom.

While traders in the past have been able to offset the bad news in one area by focusing on the positives elsewhere, analysts said they were now struggling to fire-fight on three fronts.

Tech firms were once again bearing the brunt of the selling owing to growing concerns about the colossal sums ploughed into AI hardware, factories and research, with many now questioning when they will see returns.

The latest blows came Thursday as Google parent Alphabet and Tesla came under scrutiny for massive capital spending drives.

Alphabet shares dived almost seven percent and Tesla plunged more than 14 percent.

Meta, Microsoft, and Amazon had already flagged that they would fork out more than $700 billion this year on AI ambitions, and are due to report next week.

- Key figures around 1045 GMT -

Brent North Sea Crude: DOWN 3.0 percent at $97.63 per barrel

West Texas Intermediate: DOWN 3.0 percent at $89.46 a barrel

London - FTSE 100: UP 0.3 percent at 10,671.64 points

Paris - CAC 40: UP 0.3 percent at 8,327.40

Frankfurt - DAX: UP 0.8 percent at 24,957.54

Tokyo - Nikkei 225: DOWN 2.7 percent at 64,611.15 (close)

Hong Kong - Hang Seng Index: DOWN 1.0 percent at 24,963.23 (close)

Shanghai - Composite: DOWN 1.6 percent at 3,814.20 (close)

New York - Dow: DOWN 1.0 percent at 51,711.65 (close)

Euro/dollar: UP at $1.1394 from $1.1377 on Thursday

Pound/dollar: UP at $1.3327 from $1.3315

Euro/pound: UP at 85.50 pence from 85.44 pence

Dollar/yen: DOWN at 163.71 yen from 163.85

burs-bcp/ajb/spm

R.Kloeti--VB