Global markets struggled for direction on Friday, with equities swinging between gains and losses while oil prices resumed their upward climb, as stalled U.S.-Iran negotiations and fragile ceasefire conditions weighed on investor sentiment.
Asian markets reflected the mixed mood. MSCI’s Asia-Pacific index outside Japan edged up 0.46 percent, while Japan’s Nikkei 225 gained 0.85 percent. However, stocks in China and South Korea declined, and Hong Kong remained largely flat, highlighting uneven risk appetite across the region.
Futures pointed to a weaker start in Europe, with EUROSTOXX 50 and FTSE futures falling, while U.S. futures were more stable, with Nasdaq futures slightly higher and S&P 500 futures flat.
At the center of market uncertainty remains the evolving situation in the Middle East. Despite a temporary extension of the ceasefire, tensions persist, particularly around the Strait of Hormuz, a critical global oil chokepoint. Escalating rhetoric and military posturing have kept investors cautious about the durability of any truce.
Oil markets reacted accordingly. Brent Crude rose 0.55 percent to $105.65 per barrel, while West Texas Intermediate gained 0.25 percent to $96.09, reflecting ongoing supply concerns tied to the region.
Currency markets were relatively subdued, though the U.S. dollar remained on track for weekly gains as demand for safe-haven assets persisted. The euro slipped to $1.1677, while the British pound hovered near $1.3462, both heading for weekly declines.
Investor focus is now shifting to a crucial week ahead, with major central banks, including the U.S. Federal Reserve, the European Central Bank, and the Bank of England, set to announce policy decisions. Markets will be closely watching how policymakers assess the impact of rising energy prices and geopolitical risks on inflation and economic growth.
In Japan, attention is also on the Bank of Japan, with expectations that it will maintain its current policy stance. The yen, trading near the psychologically significant 160 level against the dollar, remains under scrutiny amid warnings of potential government intervention.
Gold prices, meanwhile, eased slightly, with spot gold falling 0.5 percent, suggesting some investor repositioning after recent gains.
Overall, markets remain caught between optimism over diplomatic efforts and concern about prolonged instability, with oil prices and geopolitical developments continuing to dictate short-term direction.
