Stock markets soar, oil falls as US, Iran confirm deal to end war | Financial Markets

DEVELOPING STORYDEVELOPING STORY,

Asian stock markets surge as Washington and Tehran announce agreement to end hostiles and reopen Strait of Hormuz.

Stock markets across the Asia-Pacific are surging following the announcement of a deal between Washington and Tehran to end the US-Israel war on Iran.

Japan’s Nikkei 225 benchmark index surged more than 5 percent in morning trading on Monday, while South Korea’s Kospi jumped 5.7 percent.

Taiwan’s Taiex climbed 2.7 percent, while the ASX200 in Australia rose about 1.5 percent.

Futures for US stocks, which are traded outside of regular market hours, climbed, with those tied to the benchmark S&P500 and tech-focused Nasdaq Composite up about 1 percent and 1.6 percent, respectively.

Brent crude, the primary benchmark for global oil prices, fell more than 4 percent to around $83.70 per barrel.

“While markets had already reacted late last week when President Trump indicated that a deal was close, actual confirmation spurred a further rally,” Khoon Goh, the head of Asia research for ANZ, told Al Jazeera.

“The fall in oil prices will provide some relief for central banks around the world who were worried about the inflation outlook. Focus now turns to the US Federal Reserve, which decides on interest rates this week.”

US President Donald Trump announced the ceasefire deal in a social media post on Sunday, saying he had authorised the toll-free reopening of the Strait of Hormuz and the immediate removal of the US naval blockade of Iranian ports.

“Ships of the World, start your engines,” Trump wrote on Truth Social. “Let the oil flow!”

Iran’s Supreme National Security Council and Iranian Deputy Minister of Foreign Affairs Kazem Gharibabadi later confirmed that the sides had reached a deal.

Pakistani Prime Minister Shehbaz Sharif, whose government helped broker the deal, said that an official signing ceremony would take place in Switzerland on Friday.

Specific details of the agreement are yet to be announced.

If implemented successfully, the agreement would pave the way to a return to normal shipping in the Strait of Hormuz, whose effective closure due to Iranian threats and a US naval blockade has roiled global energy markets for nearly four months.

The blockage of maritime traffic in the strait has resulted in a daily shortfall of about 14 million barrels of oil per day, according to the International Energy Agency.

Still, global energy flows are likely to take weeks to fully return to normal due to the logistical challenges of clearing a backlog of hundreds of vessels from the Gulf, according to analysts.

More to follow…