Oil holds near 107 as dollar slips on talks

Oil held near 107 as disruption in the Strait of Hormuz persisted, while the US dollar edged lower and sterling eased to 1.354 early on Monday. Asian equity markets reached record highs, led by chipmakers after strong guidance from Intel. Shares in SK Hynix and Samsung Electronics continued to climb on AI-driven demand. Gold steadied at 4709 as investors awaited further developments in US-Iran talks.

Equities

The FTSE 100 ended Friday 0.8% lower at 10,379.08, marking its first weekly decline in five weeks as fragile progress on US-Iran peace talks weighed on sentiment. The FTSE 250 also closed down 0.8%. Concerns remained elevated with oil prices holding above $100 per barrel and the Bank of England warning that global equity markets may not fully reflect underlying risks.

A number of major UK-listed companies closed lower on Friday. AstraZeneca shares fell 3.7% by the close, while GSK dropped 2.7%, pulling the broader pharmaceutical sector down around 3%. Banking stocks were also weaker, with Barclays closing 0.9% lower and HSBC down 1.3%. Airline group Wizz Air declined 3.3% amid pressure from higher fuel costs linked to elevated oil prices.

Retailers offered a more mixed picture. Tesco and Sainsbury warned during the week that ongoing Middle East tensions could weigh on their earnings outlook, although the retail sector edged 0.1% higher by the close on Friday following data showing UK retail sales rose 0.7% in March. In contrast, Computacenter surged 14.5% on Friday after signalling it expects to beat annual profit forecasts. Packaging firm Mondi fell sharply, closing 11.1% lower after flagging rising costs tied to the Iran conflict.

In the United States, markets ended Friday on a stronger footing. The S&P 500 closed up 0.8% at 7,165.08, while the Nasdaq jumped 1.63% to 24,836.60, both setting record closing highs. The Dow Jones Industrial Average slipped 0.16% to 49,230.71.

Technology and semiconductor stocks led gains. Intel surged 23.65% on Friday to close at a record $82.57 after issuing an upbeat second-quarter revenue forecast. AMD and Arm both rose around 14% by the close, while Nvidia gained 4.32%, also finishing at a record level as it approached a $5 trillion valuation again.

The Philadelphia Semiconductor Index rose 4.32% on Friday, extending its winning streak to 18 consecutive sessions. Strength in large technology companies, including Amazon, Microsoft, Alphabet and Meta, supported the broader market alongside improving earnings expectations.

Forex & Commodities

The US dollar moved lower early on Monday as uncertainty around US-Iran negotiations weighed on sentiment. The euro traded flat at 1.173, while sterling slipped to 1.354. The yen held steady at 159.3 per dollar, remaining close to levels that have drawn concern from Japanese authorities. Currency markets were subdued ahead of this week’s central bank decisions.

Gold was steady early on Monday at 4709 per ounce, as investors awaited clearer developments in US-Iran talks. The metal had fallen late last week, ending a run of gains, but found some support as the dollar weakened slightly. Attention is also on the Federal Reserve decision this week, with policymakers expected to hold rates while assessing inflation risks linked to higher energy costs.

Oil prices rose early on Monday as disruption to Middle Eastern supply persisted. Brent crude traded at 107.2, while US West Texas Intermediate reached 95.80. Prices moved higher as shipping through the Strait of Hormuz remained largely halted, keeping supply constrained and reinforcing expectations that central banks, including the Bank of Japan, will remain cautious while monitoring the inflation impact.