* Oil dips on prospects deal to boost supply, but settles
* World share markets gain on hope Iran deal to boost growth
* Yen drops to six-month low vs dollar as Nikkei surges
By Herbert Lash
NEW YORK, Nov 25 The dollar strengthened and
world equity markets rose on Monday on expectations that the
deal to curb Iran's nuclear program will ease Mideast political
tensions and help lift global economic growth.
The breakthrough accord reached over the weekend in Geneva
halts Iran's most sensitive nuclear activities and gives it some
relief from crippling sanctions, but does not allow the OPEC
member to boost oil sales for six months.
Brent crude fell but trimmed its losses to settle near flat
on the view that the accord will not immediately increase world
oil supplies. Oil had fallen nearly 3 percent at one point.
The interim pact - aimed at easing a decades-old stand-off
between Iran and the United States - won the critical
endorsement of Iranian cleric Supreme Leader Ayatollah Ali
Khamenei. France, Britain, China, Russia and Germany also agreed
to the accord.
Brent crude prices pared most losses after hitting a
session low of $108.05 to settle down 5 cents at $111.00.
"The deal is a step in the right direction, but it's still
very early days," said Amrita Sen, chief analyst at consultants
Energy Aspects in London.
"That's why, after the knee-jerk reaction, the market is
stabilizing. It's realizing, at least in the next few months,
there's not going to be a substantial increase in oil exports."
Equity markets in Europe also pared gains, and Wall Street
ended the day little changed. The Dow and Nasdaq indices edged
less than one-tenth of a percentage point higher while the
benchmark S&P 500 closed a tad lower.
European airline stocks and French carmakers, in particular,
received a boost from the nuclear deal with Iran, which also
sent Germany's DAX to a record high.
French car makers PSA Peugeot Citroen and Renault
, which had a significant exposure to the Iranian car
market before Western sanctions against Tehran were toughened,
gained 5.1 percent and 1.4 percent, respectively.
The pan-European FTSEurofirst 300 of leading
regional shares closed up 0.41 percent at 1,302.24 while global
equity markets, as measured by MSCI's all-country world index
of 45 countries, rose a scant 0.05 percent.
The Nasdaq closed below 4,000 after topping the mark in
intraday trading for the first time since September 2000, when
the index plunged from record highs after the tech bubble burst
earlier that year.
The Dow Jones industrial average closed up 7.77
points, or 0.05 percent, at 16,072.54. The S&P 500 fell
2.28 points, or 0.13 percent, to 1,802.48 and the Nasdaq
Composite added 2.924 points, or 0.07 percent, to
Energy shares were by far the weakest on the day,
dropping 0.83 percent. A majority of the 44 components of the
index were lower. Oilfield service company Schlumberger Ltd
was the biggest drag, down 3.15 percent at $89.81.
"Less tension in the Middle East is always a positive, and
any drop in gas prices will essentially act as a tax break for
consumers going into the holiday shopping season," said Jeff
Duncan, chief executive of Duncan Financial Management in St.
Louis. "This is a real benefit for the economy."
U.S. trading is expected to be light this week, with markets
closed on Thursday for the Thanksgiving holiday and closing
early on Friday.
In Japan, a major oil importer, shares got an extra boost
from a weaker yen, surging 1.5 percent. The Nikkei average has
gained almost 11 percent in a little more than two weeks.
The Japanese currency, which typically falls when share
prices rise, had touched a sixth-month low of 101.91 yen to the
dollar as investors sold it to buy higher-yielding assets
The dollar last traded up 0.3 percent at 101.57 yen, while
the euro slid 0.33 percent against the dollar to $1.3513.
The fall in oil prices weighed on most commodity-linked
currencies, with the Canadian dollar dropping to a
4-1/2-month low of C$1.0584. Against an index of six major
currencies, the dollar was 0.25 percent higher.
U.S. crude settled down 75 cents at $94.09 a barrel.
Prices of U.S. Treasuries edged up slightly as housing data
proved weaker than expected.
Contracts to buy previously owned U.S. homes fell for a
fifth straight month in October, hitting a 10-month low and
adding to signs of cooling in the housing market. The 10-year
U.S. Treasury note rose 4/32 in price to yield
German Bunds rose after European Central Bank policymakers
said there was room for more interest rate cuts as the prospect
of lower oil prices after the Iran deal added to a low inflation
German Bund futures settled 37 ticks higher at
141.32, pushing 10-year German yields 2.8 basis
points lower to 1.73 percent.