Iran deal knocks oil lower, bolsters risk appetite

Sun Nov 24, 2013 6:44pm EST
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By Wayne Cole

SYDNEY (Reuters) - Oil prices fell sharply on Monday after Iran and six world powers sealed a deal curbing its nuclear program, a fillip for global economic growth and risk appetites that should benefit share markets.

The agreement, reached late Sunday, gives Iran some relief from crippling sanctions. While it will not be allowed to increase its oil sales for six months, any easing of Middle East tensions tends to lead to lower crude prices.

Brent crude oil shed $2.29 to $108.69 a barrel, its biggest daily drop in a month. U.S. oil dived $1.09 to $93.75 a barrel.

Attention in Asia will again be on Japanese markets as a weak yen promises to boost exports and profits. While the Nikkei .N225 ran into profit-taking on Friday it still ended the week up 1.4 percent, and has gained almost 10 percent in as many sessions.

On Wall Street, the Dow Jones industrial average .DJI ended Friday with gains of 0.34 percent, while the S&P 500 .SPX added 0.5 percent for its first ever close above 1,800.

MSCI's all-country world equity index .MIWD00000PUS rose 0.43 percent.

But with money flooding into developed world assets, emerging markets are getting cold shouldered. It was notable that MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS failed to make any headway at all last week, even as Wall Street made new peaks.

Early Monday, the index was up 0.2 percent, as Australian shares led the way with an increase of 0.7 percent .AXJO.   Continued...

A visitor walks past logos at the Tokyo Stock Exchange in Tokyo June 13, 2013. REUTERS/Toru Hanai