Markets waver as Biden set for Middle East diplomacy drive / Photo: ANDREW CABALLERO-REYNOLDS - AFP
Markets waver as Biden set for Middle East diplomacy drive
Major stock markets were mixed Tuesday and oil prices rose slightly as US President Joe Biden prepared for a trip to the Middle East aimed at preventing the Israel-Hamas conflict spreading across the region.
The haven dollar climbed on the eve of Wednesday's visit.
The pound came under pressure from official data showing cooler wages growth in Britain, increasing expectations that the Bank of England was done with raising interest rates to fight inflation.
The euro diverged against main rivals after a key survey showed German investor confidence improved more than expected in October.
This was thanks to slowing inflation and growing prospects that the European Central Bank was also done with hiking borrowing costs.
All eyes were on Biden's trip.
"The recent risk-off sentiment that had cast a shadow over the markets seems to be easing, partly due to extensive shuttle diplomacy by the White House and other regional actors," noted Stephen Innes at SPI Asset Management.
"Nevertheless, this optimism comes before Israel launches its ground offensive in Gaza, and this development could swiftly sour sentiment once more."
The US president's trip comes as Israeli Prime Minister Benjamin Netanyahu lines up forces on the Gazan border ahead of an expected ground incursion as Tel Aviv retaliates after deadly October 7 attacks by Hamas militants.
Biden was to meet Netanyahu on Wednesday, and will also see Jordanian King Abdullah II, Palestinian leader Mahmud Abbas and Egyptian President Abdel Fattah al-Sisi in hopes of finding a way to de-escalate a crisis that threatens the stability of the region.
His visit comes after his Secretary of State Antony Blinken returned for a second time since the attacks, and announced that Israel had agreed to work on civilian aid for Gaza as calls mount to let in vital supplies to avert a humanitarian catastrophe.
The drive to avert a war that could draw in other regional players, including Iran and Lebanon-based Hezbollah, helped push Wall Street higher Monday, with all three main indexes up around one percent.
Oil prices moved within a narrow band after dropping more than one percent Monday, with the commodity also capped by reports that Washington was easing restrictions on Venezuelan crude.
However, the fluid situation kept investors wary that anything could develop in an instant.
"The price action doesn't reflect an improvement in investors' outlook for the Israeli conflict, rather the absence of a significant escalation," said Ian Lyngen, at BMO Capital Markets.
A planned meeting between Chinese President Xi Jinping and his Russian counterpart Vladimir Putin on Wednesday in Beijing was also expected to be closely followed by market watchers.
- Key figures around 1100 GMT -
London - FTSE 100: UP 0.5 percent at 7,664.84 points
Frankfurt - DAX: DOWN 0.3 percent at 15,194.43
Paris - CAC 40: DOWN 0.1 percent at 7,014.71
EURO STOXX 50: DOWN 0.2 percent at 4,140.59
Tokyo - Nikkei 225: UP 1.2 percent at 32,040.29 (close)
Hong Kong - Hang Seng Index: UP 0.8 percent at 17,773.34 (close)
Shanghai - Composite: UP 0.3 percent at 3,083.50 (close)
New York - Dow: UP 0.9 percent at 33,984.54 (close)
Euro/dollar: DOWN at $1.0554 from $1.0562 on Monday
Pound/dollar: DOWN at $1.2160 from $1.2218
Dollar/yen: UP at 149.54 yen from 149.53 yen
Euro/pound: UP at 86.78 pence from 86.42 pence
Brent North Sea crude: UP 0.3 percent at $89.95 per barrel
West Texas Intermediate: UP 0.2 percent at $86.81 per barrel
T.Cortez--RTC
