World shares mixed amid renewed concerns over Middle East conflict

World shares were mixed on Wednesday as the rally of the past two days faded and oil prices resumed climbing with no end to the war with Iran in sight. Oil prices have remained sharply below their peaks near $120 a barrel hit on Monday. Such spikes have been rocking financial markets worldwide because of worries that the war could block the global flow of oil and natural gas for a long time.

Early Wednesday, the price for a barrel of Brent crude, the international standard, had jumped 2.6 per cent to $90.11. US benchmark crude oil was up 3.2 per cent at $86.08 per barrel. The future for the S&P 500 was flat and that for the Dow Jones Industrial Average edged 0.1 per cent lower. In Germany, the DAX slipped 1.6 per cent to 23,600.11, while the CAC 40 in Paris fell 1 per cent to 7,980.45. Britain’s FTSE 100 also shed 1 per cent, to 10,307.63.

Markets were mixed in Asia, where Tokyo’s Nikkei 225 gained 1.4 per cent to 55,025.37. South Korea’s Kospi picked up 1.4 per cent to 5,609.95 after gaining more than 3 per cent earlier in the day. In Hong Kong, the Hang Seng fell back, slipping 0.2 per cent to 25,898.76, while the Shanghai Composite index climbed 0.3 per cent to 4,133.43. Australia’s S&P/ASX 200 rose 0.6 per cent to $8,743.50. Taiwan’s benchmark climbed 4.1 per cent and in Bangkok, the SET gained 0.7 per cent.

Oil prices plunged Monday afternoon after hitting their most expensive level since 2022. Raising hopes the war may end soon, President Donald Trump told CBS News he thought “the war is very complete, pretty much.” However, both sides have since sharpened their rhetoric.

The US said it took out more than a dozen minelaying Iranian vessels Tuesday, and the Islamic Republic vowed to block the region’s oil exports, saying it would not allow “even a single litre” to be shipped to its enemies. One point where Trump has remained clear was his desire to keep the Strait of Hormuz open. The war has effectively blocked the waterway off Iran’s coast, where a fifth of the world’s oil sails on a typical day.

On Tuesday, the S&P 500 dipped 0.2 per cent, a day after its latest wild swings caused by extreme moves in the oil market. The Dow fell 0.1 per cent and the Nasdaq composite edged less than 0.1 per cent higher.

Oracle’s shares on the Nasdaq surged 12 per cent in premarket trading early Wednesday after the company reported its earnings and revenue jumped 20 per cent in the last quarter, much better than analysts had forecast.

Stock markets have a history of bouncing back relatively quickly from military conflicts, as long as oil prices don’t stay too high for too long. Uncertainty about whether that may happen this time around has led to stunning swings up and down for markets worldwide, often hour-to-hour.

If oil prices do stay high for long, household budgets already stretched by high inflation could snap under the pressure. Companies would see their own bills jump for fuel and to stock items on their store shelves or in their data warehouses.

It all raises the possibility of a worst-case scenario for the global economy, “stagflation,” where growth stagnates and inflation remains high. In other dealings early Wednesday, the dollar rose to 158.46 Japanese yen from 158.05 yen. The euro fell to $1.1601 from $1.1610.