San Francisco Frontiers - Oil rallies, stocks drop as Trump dashes hopes fighting will soon end

Investors found little solace in the US president's address to the nation, in which he again urged countries dependent on the waterway for energy supplies to reopen it themselves.

"Trump’s comments injected fresh volatility into financial markets," said Patrick Munnelly, a market strategist at Tickmill Group. "Although Trump assured that the waterway would reopen 'naturally' once tensions eased, he provided no timeline or details."

Signs of de-escalation had buoyed markets in recent sessions, but Trump's late Wednesday televised speech dashed those hopes.

International oil benchmark, Brent North Sea crude, which had fallen below $100 a barrel ahead of Trump's speech, went on to rally around eight percent to above $109 per barrel.

The three major New York equity indexes opened more than one percent lower.

In mid-afternoon trading in Europe, Frankfurt's stock market shed more than two percent. Paris dropped over one percent, even as oil giant TotalEnergies was up three percent on reports it made a one billion dollar profit in March trading petroleum products.

London dipped about half a percent, helped by gains of over three percent for the share prices of energy heavyweights BP and Shell.

"Market sentiment has deteriorated overnight after Trump's much anticipated address delivered little to nothing new on potential timelines or conditions for ending hostilities against Iran," said Deutsche Bank managing director Jim Reid.

"There was no signal of the US seeking an imminent offramp out of the war."

The dollar, seen as a safe haven investment, rose strongly against major rivals.

Earlier in the day, Tokyo closed down more than two percent and Hong Kong and Shanghai also fell.

Trump's claims that Washington and Tehran were in peace talks have been denied by the Islamic republic, which insists the Strait of Hormuz will remain closed to the country's "enemies".

Britain was hosting talks featuring some 40 nations Thursday to discuss how to reopen the waterway, through which a fifth of global oil normally travels.

World Bank Managing Director Paschal Donohoe said he was fearful about the global economic impact of the crisis.

"We are extremely concerned regarding the effect that this will have on inflation, on jobs and on food security," he told AFP as the Bank partners with the International Monetary Fund and International Energy Agency to coordinate aid responses.

- Key figures at around 1340 GMT -

Brent North Sea Crude: UP 8.1 percent at $109.29 a barrel

West Texas Intermediate: UP 13.0 percent at $113.04 a barrel

New York - Dow: DOWN 1.4 percent at 45,692.74 points New York - S&P 500: DOWN 1.3 percent at 6,492.36

New York - Nasdaq Composite: DOWN 1.7 percent at 21,465.71

London - FTSE 100: DOWN 0.3 percent at 10,328.15

Paris - CAC 40: DOWN 1.3 percent at 7,874.75

Frankfurt - DAX: DOWN 2.2 percent at 22,789.49

Tokyo - Nikkei 225: DOWN 2.4 percent at 52,463.27 (close)

Hong Kong - Hang Seng Index: DOWN 0.7 percent at 25,116.53 (close)

Shanghai - Composite: DOWN 0.7 percent at 3,919.29 (close)

Euro/dollar: DOWN at $1.1519 from $1.1586 on Wednesday

Pound/dollar: DOWN at $1.3189 from $1.3305

Dollar/yen: UP at 159.63 from 158.88 yen

Euro/pound: UP at 87.32 pence from 87.08 pence

D.Brown--SFF