Markets on a Seesaw in Gulf Crisis
Financial markets today rode a roller coaster of hope and fear raised by the latest diplomatic efforts to resolve the Persian Gulf crisis.
In Tokyo today, markets calmed after the U.N. secretary general announced a new peace initiative.
The Nikkei Stock Average gained 78.09 points closing at 23,047.36. The Nikkei index rose 71.43 points Wednesday.
By midday on London’s Stock Exchange, the Financial Times-Stock Exchange 100-share index was down 20.7 points at 2,108.2.
Dealers initially sought the dollar as a safe haven after the U.S.-Iraqi talks in Geneva ended without success. But after U.N. Secretary General Javier Perez de Cuellar said he will meet with Saddam Hussein in a last-minute peace mission, the dollar fell in Tokyo, dropping 1.73 yen to close at 135.10 yen.
But on European markets, the dollar rose against most major currencies. Gold prices were higher.
Oil prices moved higher early today. North Sea Brent Blend, the most widely traded international crude oil, was 69 cents higher at $26.84 per barrel on London’s International Petroleum Exchange late this morning.
On the New York Mercantile Exchange, light sweet crude oil for February delivery was $1.29 higher at $28.55 per barrel.
The trading pace was more subdued than during the previous session, when oil prices soared dramatically on news that the Geneva talks between Secretary of State James A. Baker III and Iraqi Foreign Minister Tarik Aziz had failed.
News of the stalemate ignited a salvo of buying, sending oil prices flying up $7 a barrel in a matter of minutes.
But the jitters were still around today.
“Oil traders are sitting on pins and needles looking for the next thing to come out of the Middle East,” said Susan Hammargren of Geldermann Inc.
Crude oil for delivery in February on the New York Mercantile Exchange was up 89 cents at $28.15 a barrel in afternoon trading.
Oil products also gained, with unleaded gasoline for February delivery up 1.49 cent to 74.80 cents a gallon and heating oil rising 1.11 cent to 78.20 cents a gallon.
