By Sherry Qin


Asian equities rose and oil prices were relatively stable early Friday, as the U.S. raced to keep Israel's war in Lebanon from jeopardizing the fragile cease-fire and derailing talks with Iran this weekend.

President Trump asked Israeli Prime Minister Benjamin Netanyahu to scale back attacks on Lebanon on Thursday as he was concerned that the fighting could undermine the cease-fire and efforts to open the Strait of Hormuz, a U.S. official said, as both Iran and cease-fire mediator Pakistan complained that Israel's Lebanon war was a truce violation.

The U.S. and Iran are set to start talks in Pakistan this weekend, with Vice President JD Vance leading the U.S. delegation. An Iranian delegation arrived in the Pakistani capital Islamabad late Thursday, The Wall Street Journal reported, citing people familiar with the matter.

Although the cease-fire appears to be largely holding, traffic at the key waterway remains mostly blocked as only eight ships crossed the Strait of Hormuz on Thursday, far below the usual 135 daily transits. An Iranian lawmaker said earlier that Tehran was charging some ships $2 million.

Oil prices were relatively stable as market participants hope that the U.S.-Iran talks will bring a long-term deal. Front-month Brent crude oil was 0.8% higher at $96.63 a barrel and WTI crude was up 1.0% at $98.88 a barrel.

Brent typically trades at a premium to WTI crude oil, but the pattern has been upended since the start of the conflict. The inverted spread measures the difference between the prices of Brent for June delivery and WTI for May delivery as their contracts expire on different days.

However, WTI's premium over Brent has widened amid significant near-term tightness in the oil market due to the loss of supply from the Middle East and expectations that conditions will loosen over the next couple of months, said Hamad Hussain, economist at Capital Economics.

Even if the strait reopens, it will take some time for supplies to reach the international market, ANZ Research analysts said. At best, two million to three million barrels a day would return to markets in the first month, they said.

Asian equities rose broadly, as the fragile cease-fire brought relief to investors. Japan's Nikkei Stock Average gained 1.5% and South Korea's Kospi climbed 2.1%. Hong Kong's Hang Seng Index was 0.8% higher and China's Shanghai Composite Index advanced 0.9%.

Tech shares rose across Asia as risk-on sentiment resumed, led by chip stocks. SK Hynix and Samsung Electronics were up 3.6% and 2.3%, respectively, and TSMC gained 1.3%.

Asian currencies mostly weakened against dollar ahead of the U.S.-Iran talks. The dollar edged 0.1% higher to 159.11 yen and rose 0.4% to 1,479.90 won.


Write to Sherry Qin at sherry.qin@wsj.com


(END) Dow Jones Newswires

04-09-26 2348ET