Oil prices jumped, European stock markets retreated and the dollar firmed Thursday as hopes of a Middle East peace accord faded on conflicting headlines on the state of talks.
US President Donald Trump has described the latest discussions as being on the “borderline” between a deal and renewed strikes.
Pakistan’s army chief was due in Iran on Thursday, Iranian media reported, with Islamabad mediating as Tehran examines the new US proposal to end the war.
“Markets pulled back across Europe as the waiting game to end the Iran war rumbled on,” said Dan Coatsworth, head of markets at AJ Bell.
There were earlier big gains for technology stocks in Asia after chip giant Nvidia posted record quarterly revenue of $81.6 billion, blowing past Wall Street forecasts on the voracious demand for artificial intelligence hardware.
Sentiment was also boosted by Elon Musk’s filing for a public sale of SpaceX shares, which could be the largest initial public offering in history.
South Korea’s benchmark Kospi index surged 8.4 percent, helped by Samsung Electronics shares after unions paused a 18-day strike impacting the group.
Japan’s Nikkei index ended with a gain of 3.1 percent.
But as trading entered the afternoon in Europe, all eyes were on US-Iran war developments and the potential fallout for economies on the continent.
The EU warned Thursday that eurozone growth would be less than expected this year, and inflation significantly higher than forecast, as the Mideast war and subsequent energy shock take their toll.
It came as a key survey revealed that business activity in the eurozone contracted further in May, weighed down by weak demand caused by a conflict.
The eurozone purchasing managers’ index (PMI) published by S&P Global, an important gauge of the economy’s overall health, registered a reading of 47.5 — a 31-month low — after 48.8 in April.
A reading above 50 indicates growth while a figure below 50 signals contraction.
British private-sector activity meanwhile unexpectedly contracted this month, marking the first decline in output in over a year, S&P Global added.
“The UK economy is facing a perfect storm, as rising political uncertainty adds to the growing impact from the war in the Middle East,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
On the corporate front, SpaceX’s filing with US regulators laid out plans for what could become the largest initial public offering in history as Musk’s rocket and satellite company seeks to raise up to $75 billion.
