Asian stocks up as Trump announces Iran-Israel ceasefire
Oil prices eased after Donald Trump announced a ceasefire agreement between Iran and Israel © Giuseppe CACACE / AFP
TOKYO, Japan – Asian shares gained and oil prices were down Tuesday, as fears of an energy market shock eased following US President Donald Trump’s announcement of a ceasefire between Iran and Israel.
Investors were relieved that Iran did not retaliate to a US attack on its nuclear facilities by throttling oil transport through the strategic Strait of Hormuz.
On Monday, Iran said it had launched missiles at a major US base in Qatar, which described the situation as stable, while analysts said oilfield assets were unaffected.
READ: Oil prices tumble as markets shrug off Iranian rebuttal to US
“Tehran played it cool. Their ‘retaliation’ hit a US base in Qatar — loud enough for headlines, quiet enough not to shake the oil market’s foundations,” said Stephen Innes at SPI Asset Management.
“And once that became clear, the war premium came crashing out of crude,” with Brent and the main US crude contract WTI sliding more than seven percent overnight.
Both oil contracts were down over two percent on Tuesday.
In Asia, the mood was largely upbeat, with Tokyo and Hong Kong up 1.4 percent, Shanghai gaining 0.8 percent and Seoul jumping 2.7 percent.
Singapore gained 0.7 percent, Sydney was up 1.1 percent and Taipei put on 1.8 percent, but Jakarta was down 1.7 percent.
Trump said Iran and Israel had agreed to a staggered ceasefire that would bring about an “official end” to their conflict, as strikes continued to hammer Tehran.
Iran’s foreign minister said Tuesday that Tehran did not intend to continue its strikes if Israel stopped its attacks.
“Details of the ceasefire agreement are still sparse at the time of writing and as such the detente and de-escalation is not a done deal,” wrote Michael Wan at MUFG.
“Nonetheless, latest news reports suggest Iran has agreed to the ceasefire and if this is right, the left tail risk of more extreme scenarios resulting in significant oil supply disruptions have meaningfully diminished.”
In forex markets, the dollar gave up gains after Federal Reserve Governor Michelle Bowman said she would support cutting interest rates at July’s meeting if inflation holds steady.
The market currently expects the Fed to resume cutting interest rates in September.
Bowman indicated that “ongoing progress in tariff negotiations providing a less risky economic environment to adjust policy”,” prompting the dollar to weaken, Wan said.
