Global stock markets surged after US President Donald Trump announced he had called off a plan to attack Iran and suggested a peace deal with Tehran is imminent.
Wall Street's S&P 500 closed nearly 1.8% higher on Thursday, ending a three-day losing streak and posting its biggest single-day gain since April. The tech-heavy Nasdaq Composite rose 2.5%, while the Dow Jones Industrial Average gained about 1.9%.
The rally extended to Asia-Pacific markets during Friday's trading session, with Japan, South Korea, Taiwan, Hong Kong and Australia all posting gains. South Korea's Kospi, the best-performing major index this year, rose more than 8% in morning trade, while Japan's Nikkei 225 gained as much as 4%. Taiwan's TAIEX rose about 2.4% and Australia's ASX 200 gained roughly 1.8%. In Hong Kong, the Hang Seng Index climbed more than 1%.
Brent crude, the main international oil benchmark, fell about 1% to below $89.50 a barrel on expectations that the Strait of Hormuz would return to normal. In peacetime, the strait carries about one-fifth of global energy supplies.
The market rebound came after Trump on Thursday suggested a deal to end the war with Iran could be signed as early as this weekend. “We just got a great deal on the war with Iran... subject to the paperwork being finalized,” Trump told reporters in the White House’s Oval Office.
Iran has not publicly confirmed Trump's statement, but a foreign ministry spokesperson told reporters a memorandum of understanding with the US is “under review.”
“For the rally to be sustained, investors will want to see not only the deal actually signed, but also the Strait of Hormuz fully reopened,” Khoon Goh, head of Asia research at ANZ, told Al Jazeera. “Only then will we see the rally extend.”
Fabien Yip, a market analyst at IG in Sydney, Australia, said the rally reflected “a significant de-escalation of geopolitical risk,” as well as anticipation of SpaceX’s initial public offering on Friday, expected to be the largest listing in history. “The broader takeaway from the follow-through rally in Asia today is that buying on dips remains real,” Yip said. “That’s important in interpreting what happened this past week. This looks less like a structural break in the bull market and more like a healthy correction after a fast, nearly vertical rise, a type of consolidation that could extend the life of the rally.”
