US and European markets rise as oil steadies

London and Paris closed the day up 0.8%, while Frankfurt jumped 1.7%

US and European stock markets rose Wednesday as oil prices steadied, after Asian bourses suffered deep losses amid inflation worries sparked by the US-Iran war.

Markets have been roiled much of the week as the war between the US and Iran effectively closed shipping through the Strait of Hormuz, where a fifth of the world’s crude oil travels as well as considerable liquefied natural gas (LNG) supplies travel through.

That sent crude and gas prices spiking higher, triggering fears of widespread inflation that could strangle economic growth.

US equities finished higher, with the S&P 500 up 0.8%.

Analysts also said reports on US private-sector hiring and services industry activity that topped expectations also helped sentiment.

Investors “are breathing a sigh of relief” after the better economic data, said Jack Ablin of Cresset Capital Management.

If you put this military action in context, history suggests that investors will eventually work their way through the challenges and markets kind of carry on, Ablin said.

Earlier, London and Paris closed the day up 0.8%, while Frankfurt jumped 1.7%.

The gains came despite steep losses across stock markets in Asia, which is heavily dependent on Middle East oil and gas supplies.

Energy intelligence firm Kpler said oil tanker transits through the Strait of Hormuz had declined by 90% from last week.

Seoul led losses in Asia as the Kospi dipped more than 12%, suffering its worst two-day collapse since the 2008 financial crisis, with trading briefly halted.

Because South Korea, Japan, China and Taiwan rely heavily on energy shipments that pass through the Strait, any blockage would have significant negative effects on the market, said Chung Hae-chang, an analyst at Daishin Securities.

Nikkei 225 ended off more than 3%, with chipmakers Advantest and Tokyo Electron plunging more than 4%.

Elsewhere in Asia, Bangkok dropped 8% to also spark a brief trading halt, and Taipei dipped more than 4%.