[MARKET ANALYSIS] Asia-Pac stocks rallied on the US-Iran two-week ceasefire agreement
APAC Stocks: Positive
- Asia-Pac stocks rallied across the board with markets euphoric and relieved after US President Trump announced a two-week ceasefire between the US and Iran in the final hours before his Tuesday evening deadline. The ceasefire was proposed by Pakistan and is subject to the opening of the Strait of Hormuz, which Iran was said to have agreed to, while the US and Iran are set to conduct talks on Friday in Islamabad. Furthermore, Israel and Lebanon were reported to be part of the ceasefire, although Israeli PM Netanyahu later denied that Lebanon was included.
ASX 200: +2.7%
- Rallied with the gains led by outperformance in gold miners and tech, while energy is at the other end of the spectrum amid the slump in oil prices.
Nikkei 225: +5.0%
- Rose above the 56,000 level with sentiment in Japan boosted by the lower oil prices, while participants also digested the firmer-than-expected wages data.
Hang Seng & Shanghai Comp: Hang Seng +2.6% / Shanghai Comp +1.9%
- Chinese markets joined in on the widespread risk-on mood amid the Iran ceasefire and as Hong Kong participants returned to the market following a five-day closure.
US Equity Futures: Higher
- US index futures surged on Trump's ceasefire announcement.
European Equity Futures +5.1%
- Indicate a stellar open for the cash market with Euro Stoxx 50 futures up over 5%.
Context
The announcement of a two-week ceasefire between the US and Iran has sparked a broad rally in Asia-Pacific stocks, reflecting market relief and optimism over potential de-escalation in tensions. This geopolitical development not only supports risk sentiment across the region but also contributes to a notable rebound in affected sectors like gold mining, while lower oil prices may positively impact consumers and certain stock indices. The implications could foster further positive sentiment in global markets as negotiations proceed.
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