IEA chief warns of ‘biggest energy security threat in history’, European stocks fall
European stocks dipped on Thursday while oil prices rose. The head of the International Energy Agency highlighted an unprecedented threat to global energy security.
The pan-European Stocks 600 index fell about 0.4% during morning trading. Most regional sectors and exchanges ended in the red. Meanwhile, Brent crude oil, the international benchmark, increased by 2.2% to $104.17 per barrel.
In a conversation with CNBC’s Steve Sedgwick, IEA Director-General Fatih Birol stated in Singapore that the world is encountering “the greatest energy security threat in history.” He also expressed concerns about “difficult days” ahead for European jet fuel supplies linked to the conflict in Iran.
On the stock front, L’Oreal shares jumped 8.7% after the cosmetics company reported its strongest quarterly growth in two years. Nokia shares rose 8.2% following a better-than-expected quarterly profit.
Apart from this, most Asian markets ended lower on Thursday, reversing early gains due to news of U.S. actions against Iranian oil tankers. Japan’s Nikkei Stock Average dropped by 0.75% to close at 59,140.23, despite reaching a high of $60,013.98 initially.
Interestingly, Japan’s manufacturing sector expanded at the fastest pace in four years in April, as reported by S&P Global Flash Index. Companies increased production amid supply concerns stemming from ongoing tensions in the Middle East.
In South Korea, the Kospi reached an intraday high but concluded 0.90% lower at 6,475.81. The country’s economy saw better-than-expected growth in the first quarter, its highest since late 2020.
Australia’s S&P/ASX 200 index also fluctuated, ending down by 0.57% at 8,793.40. China’s CSI300 index fell 0.28%, and Hong Kong’s Hang Seng index was down 0.92% just before closing.
In contrast, crude oil futures were up, with West Texas Intermediate at $94.20 a barrel and Brent crude at $103.50 per barrel as of early morning ET.
Extended ceasefire between Iran and the US sends Japanese and South Korean markets to record highs
Japan and South Korea’s markets reached record highs on Thursday, buoyed by optimism following a ceasefire extension with Iran and positive corporate earnings. The Nikkei stock index briefly hit a high of 60,013.98 yen, though it later fell 0.31% as traders sold off for profits.
The manufacturing activity in Japan has surged, as indicated by a report stating significant production increases amid supply chain concerns. Notably, SoftBank Group’s shares rose over 6% as it seeks to raise capital through a $10 billion margin loan tied to its AI investments.
South Korea’s Kospi also surged, hitting an intraday peak, while the small-cap Kosdaq rose slightly. The country’s economic growth exceeded expectations in the first three months of the year, reversing previous declines.
In Australia, the S&P/ASX 200 index experienced volatility, closing down by 0.76%. Meanwhile, energy prices rose, with West Texas Intermediate futures increasing to $93.42 a barrel.
7 of 11 GICS sectors rose on Wednesday
On Wednesday, seven out of eleven GICS sectors managed to end in positive territory. Information technology stocks led the way with a 2.31% increase, while communications services and energy sectors followed closely with gains of 1.41% and 1.14%, respectively.
On the other hand, real estate stocks experienced a drop of 0.69%. Industries such as financial and utilities also saw slight declines of 0.20% and 0.16%.
Stocks whose prices fluctuate significantly after hours: Tesla, IBM, etc.
A few notable stocks were particularly volatile in after-hours trading:
- Tesla saw its shares initially rise 4% after reporting earnings that exceeded expectations but later dropped about 1% in after-hours trading.
- IBM’s stock fell nearly 7% despite reporting an earnings beat, as it did not raise its full-year forecast.
- ServiceNow had impressive first-quarter revenue that also surpassed estimates. However, its shares fell over 13% on disappointing subscription revenue.
