Oil nears USD 98 as Iran war rattles Europe while Asian stocks advance

Bangkok,UPDATED: Jul 23, 2026 15:50 IST

European shares were mostly lower and Asian markets largely advanced on Thursday, even as the intensifying war with Iran pushed Brent crude above USD 98 a barrel and added to concerns over inflation and interest rates.

US futures for the S&P 500 and the Dow Jones Industrial Average were both down 0.4 per cent. In Europe, Germany's DAX fell 0.6 per cent to 24,999.26, Paris' CAC 40 shed 1.1 per cent to 8,349.33 and Britain's FTSE 100 edged 0.2 per cent lower to 10,696.31.

Asian shares mostly rose, led by South Korea's Kospi, which gained 4.4 per cent to 7,096.89. Demand for artificial intelligence-linked stocks picked up again despite the previous retreat on Wall Street, with Samsung Electronics rising 3.7 per cent and memory chipmaker SK Hynix advancing 4.9 per cent.

Japan's Nikkei 225 added 0.5 per cent to 66,422.60, with technology stocks leading gains. Shares in SoftBank Group climbed 3.8 per cent. The US dollar was trading at 163.36 yen as the Japanese currency stayed near its weakest level in 40 years. Expectations that the gap between US and Japanese interest rates will widen because of higher inflation in the US have helped lift the dollar against the yen.

Elsewhere in Asia, Hong Kong's Hang Seng rose 1.3 per cent to 25,210.81, while the Shanghai Composite index recovered from earlier losses to gain 0.3 per cent and close at 3,876.78. Australia's S&P/ASX 200 rose 0.2 per cent to 8,839.00. Taiwan's Taiex edged 0.1 per cent higher, while India's Sensex fell 0.6 per cent.

On Wednesday, US stock indexes were little changed as oil prices climbed 3 per cent. The S&P 500 slipped 0.1 per cent and the Dow Jones Industrial Average was nearly unchanged. The Nasdaq composite fell 0.6 per cent as Alphabet, Google's parent company, dropped 1.5 per cent ahead of its earnings report. After trading ended, the company reported better-than-expected second-quarter results, suggesting its heavy spending on artificial intelligence is paying off so far. Even so, its share price fell another 3.5 per cent in premarket trading.

Tesla's share price dropped 1.3 per cent on Wednesday and another 5.6 per cent in after-hours trading after the Elon Musk-run carmaker said its profits fell last quarter as it spent more on research and development, reducing earnings from a sharp rise in vehicle sales. Investors have been looking for signs that the large sums flowing into processors, computer memory and other parts of the AI boom will generate enough profit to justify the spending. Such concerns have kept AI stocks at the centre of Wall Street's swings for weeks.

Oil prices remained a major focus because they can raise costs for businesses, reduce profits and hurt consumer spending. Early on Thursday, Brent crude, the international benchmark, was up 4.3 per cent at USD 98.16 a barrel, its highest level since early June. Earlier this month, it had fallen below USD 72, roughly where it was before the war with Iran. But continuing fighting has stopped oil tankers from using the Strait of Hormuz to leave the Persian Gulf. Normally, a fifth of all traded oil and natural gas passes through the narrow waterway. US benchmark crude rose 3.6 per cent to USD 89.91 a barrel.

The US military said on Wednesday that it was carrying out a 12th straight night of strikes against Iran, as both sides increasingly targeted civilian infrastructure. Higher oil prices are raising the risk of inflation picking up again, which could push the Federal Reserve and other central banks to raise interest rates, slowing economies and weighing on stock and other asset prices. The yield on the 10-year US Treasury rose to 4.65 per cent from 4.63 per cent late Tuesday and from 3.97 per cent before the war with Iran began. It has already helped lift long-term US mortgage rates to their highest level in nearly a year. In other early Thursday trading, the euro was unchanged at USD 1.1414.

Overall, markets remained pulled between renewed interest in AI-linked stocks and rising concern over oil prices, inflation and interest rates, with Asian shares gaining, European shares slipping and crude prices surging as the conflict with Iran continued.

With PTI Inputs

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