Monday, April 6

Stocks climb despite US military action in Venezuela


The FTSE 100 (^FTSE) and other European markets rose on Monday morning, despite heightened geopolitical tensions following US military action in Venezuela.

The US launched airstrikes on Venezuela over the weekend and captured the country’s president Nicolás Maduro and his wife, who were then flown to New York.

US president Donald Trump said on Saturday that the US would “run” Venezuela “until such time as we can do a safe, proper and judicious transition”.

In an interview with CBS on Sunday, US secretary of state Marco Rubio stopped short of saying Washington would directly govern the country.

“There’s a quarantine right now in which sanctioned oil shipments – say there’s a boat and that boat is under U.S. sanctions,” he said. Rubio said that this offered “a tremendous amount of leverage that will continue to be in place until we see changes”.

Oil (BZ=F, CL=F) prices slumped on Monday, while gold (GC=F) prices jumped, following the developments over the weekend.

Lale Akoner, global market analyst at eToro, said: “The reported capture of Venezuelan president Nicolás Maduro might be a geopolitical shock, but for markets it’s not an oil-price earthquake. Venezuela accounts for roughly 1% of global supply, and even in a best-case political outcome, restoring production would take years.”

“Most of the disruption risk is already priced in, meaning this is a slow-moving structural story rather than a trigger for sustained oil price moves,” he added.

  • London’s premier index, the FTSE 100 (^FTSE), rose 0.2% on Monday morning.

  • Germany’s DAX (^GDAXI) jumped 1%.

  • In France, the CAC 40 (^FCHI) advanced 0.6%

  • The pan-European STOXX 600 (^STOXX) climbed 0.5%.

  • The pound fell 0.2% against the dollar (GBPUSD=X), trading at $1.3425 at the time of writing.

  • Over in the US, Dow Jones Industrial Average futures (YM=F) inched up 0.1%, while S&P 500 futures (ES=F) rose 0.2%. Nasdaq 100 futures (NQ=F) climbed about 0.5%.

LIVE 4 updates

  • Vicky McKeever

    FTSE risers and fallers

    Defence stocks were among the biggest risers on the FTSE 100 (^FTSE) on Monday, including Babcock International (BAB.L) and BAE Systems (BA.L).

    Saxo UK investor strategist Neil Wilson said: “Oil prices fell but gold and defence shares rose as markets had their first real stab at reacting to the US snatch-and-grab raid in Venezuela and its ongoing fallout. Markets are never very good at pricing geopolitical risk or events.

    “Usually, as an investor, it’s best to keep calm and carry on – fundamentals win out in the end,” he said. “But for now there is a considerable degree of headline risk around Venezuela that traders should be mindful of.”

    “President Trump has threatened military action against Colombia, warning it could be next if it fails to combat illicit drug trafficking,” he added. “He’s also warning against Mexico and Greenland.”

  • Vicky McKeever

    Gold prices jump as geopolitical tensions rise

    Events in Venezuela fuelled concerns about rising geopolitical tensions, pushing gold prices higher on Monday morning.

    Gold futures (GC=F) surged 2.6% higher to $4,443.60 per ounce at the time of writing on Friday morning, while spot gold gained 2.3% at $4,433.71 an ounce.

    Hargreaves Lansdown’s Britzman said that the jump in gold prices came as “traders seek shelter from geopolitical tremors sparked by Washington’s dramatic move in Venezuela”.

    “The metal’s rally builds on last year’s stellar run, with its attractions as a so-called safe haven colliding with uncertainty over US rate signals ahead of Friday’s payrolls,” he said. “For now, gold is wearing the crown as the market’s preferred insurance policy against both political risk and policy surprises.”

  • Vicky McKeever

    Oil prices fall following US action in Venezuela

    Oil prices declined on Monday, following US military action in Venezuela over the weekend.

    Brent crude (BZ=F) futures were down 0.6% to $60.37 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) fell by the same margin to $56.97 a barrel.

    Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “The immediate price reaction isn’t quite as extreme as some may have thought. That’s because Venezuela may have the world’s biggest reserves, but it’s only pumping roughly 1 million barrels a day (under 1% of global output), so the short‑term barrel maths doesn’t scream ‘crisis’.”

    “The real market-moving question is the medium-term impact,” he said. “If sanctions ease and serious investment flows back into creaking infrastructure, Venezuela could eventually add meaningful supply, but this won’t be a quick process.”

  • Vicky McKeever

    Good morning!

    Hi from London. In the first full trading week back from the festive break, markets are focused on geopolitical developments following a US military operation in Venezuela over the weekend.

    Follow our rolling coverage today for updates on how this and other events are moving markets.

    Let’s get to it.

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