NEW YORK, March 25 — Oil prices surged today following the blockage of the Suez canal, while stocks were mixed as governments struggle to contain the latest wave of the coronavirus.
Crude futures surged six per cent as traders assessed the likely impact from the grounding of a giant container ship in one of the world’s busiest shipping routes.
Dozens of ships were blocked by the Panama-flagged ship, but historic sections of the canal were reopened in an effort to ease the traffic jam.
“The energy market has largely priced in the short-term crude demand hit,” said Ed Moya of Oanda.
Meanwhile, Wall Street stocks suffered another down day, despite strength in petroleum-linked equities. The tech-rich Nasdaq slumped 2.0 per cent behind drops in Apple, Facebook and other tech giants.
“We’re sort of taking a pause for breath,” said FHN Financial economist Chris Low. “There’s definitely some rotation going on.”
Low said disappointing durable goods data fuelled the rout, including weakness in motor vehicles and parts, an industry that has seen production cuts due to a shortage of semiconductors.
Another source of economic pressure has been the Texas power outage in February, Low said.
Angst is also rising in the wake of congressional appearances by Treasury Secretary Janet Yellen, who confirmed that President Joe Biden is willing to hike corporate taxes to pay for his administration’s priorities.
“People thought Biden was going to be centrist and moderate, but his taxing and spending program are moving him further left than expected,” said Gregori Volokhine of Meeschaert Financial Services. “All the talk of tax hikes is making investors nervous.”
Easter mea culpa
European stocks were mixed amid continued concerns the continent’s worsening coronavirus crisis could derail economic recovery, although survey data showed the eurozone economy had returned to growth in March for the first time in six months.
Europe’s two biggest economies, Germany and France, have been forced along with other countries to impose new restrictions to battle the disease, as they also struggle to get vaccination programs rolling properly.
But Germany scrapped plans to close most of the country’s shops over Easter from April 1 to 5 after stinging criticism of the plan.
The government instead asked people to stay home over the holiday and Chancellor Angela Merkel issued a mea culpa after reversing the measures.
In Asia, Hong Kong was among the biggest losers, dropping by two per cent on news that the government had suspended its Pfizer/BioNTech vaccine program over concerns about packaging, dealing a blow to the city’s already slow inoculation effort.
Hong Kong’s Hang Seng Index has now fallen into a correction, having lost more than 10 per cent from its recent high.
Tokyo also shed two per cent, while Shanghai, Mumbai and Jakarta each lost more than one per cent.
Key figures around 2040 GMT
New York — Dow: DOWN less than 0.1 per cent at 32,420.06 (close)
New York — S&P 500: DOWN 0.6 per cent at 3,889.14 (close)
New York — Nasdaq: DOWN 2.0 per cent at 12,961.89 (close)
London — FTSE 100: UP 0.2 per cent at 6,712.89 (close)
Frankfurt — DAX 30: DOWN 0.4 per cent at 14,610.39 (close)
Paris — CAC 40: UP less than 0.1 per cent at 5,947.29 (close)
EURO STOXX 50: UP 0.1 per cent at 3,832.55 (close)
Tokyo — Nikkei 225: DOWN 2.0 per cent at 28,405.52 (close)
Hong Kong — Hang Seng: DOWN 2.0 per cent at 27,918.14 (close)
Shanghai — Composite: DOWN 1.3 per cent at 3,367.06 (close)
Euro/dollar: DOWN at US$1.1812 from US$1.1849 at 2200 GMT
Pound/dollar: DOWN at US$1.3681 from US$1.3752
Euro/pound: UP at 86.32 pence from 86.17 pence
Dollar/yen: UP at 108.71 yen from 108.59 yen
West Texas Intermediate: UP 5.9 per cent at US$61.18 per barrel
Brent North Sea crude: UP 6.0 per cent at US$64.41 per barrel — AFP
