Geopolitical tensions weigh on markets

US stock indices closed marginally higher on Monday led by energy stocks as investors were cautious to make big bets ahead of earnings season. Investors expect higher profits with FactSet estimating first-quarter earnings could rise as much as 12%. The dollar inched lower pulling back after a rally following rising geopolitical tensions as the US struck a Syrian air base after a suspected chemical weapons attack that killed civilians. In Europe, French stocks underperformed after Sunday polls showed Socialist candidate Jean-Luc Melenchon overtook center right conservative candidate Francois Fillon for the first time. The first round of voting in the French presidential election will be held on April 23. Oil futures prices were pulling back as rising US shale oil production offset concerns over geopolitical tensions in the Middle East.

On Tuesday, US stocks closed lower as investors shied away from risky assets with no resolution in rising geopolitical tensions over North Korea and Syria in sight. The dollar continued weakening. Oil futures prices were extending gains supported by news Saudi Arabia said it wanted to extend major oil producers’ agreement to cut crude production for another six months when OPEC meets in May.

On Wednesday, safe-haven assets such as bonds and gold were still in demand on lingering geopolitical concerns. European stocks inched higher led by car maker shares which advanced on positive sales results from BMW, Volkswagen and Renault. Oil retreated as Energy Information Administration reported that US domestic output is still climbing and shrugged off the positive inventories data.

On Thursday, US stocks closed lower for the third straight day after earnings reports from major US banks. Wells Fargo stocks lost 3.3% weighing on S&P 500 on report of a drop in mortgage banking revenue.

On Friday Wall Street, European markets and several others were shut for Good Friday holiday. Gold was on track for record increase since June.