US and Iran Agree to Ceasefire, Oil Prices Plummet, Asian Stocks Soar

Agence France-Presse reported that US President Trump announced a two-week suspension of attacks as the deadline he set for Iran to reopen a key maritime route approached, stating that he had received a 'feasible' 10-point plan. Shortly after, Iran announced that the Strait of Hormuz, through which one-fifth of the world's oil and natural gas is transported, would be safe for passage during the ceasefire. Crude oil prices plummeted in response, with West Texas Intermediate (WTI) falling by nearly 20% and Brent Crude by 16%. Investors breathed a sigh of relief after five consecutive weeks of war impacting supply. Markets were buoyed by hopes that the crisis, which had affected the global economy for over a month, would finally end, leading to a significant surge in global stock markets. Seoul's stock market rose by 6.9%, Tokyo closed up 5.4%, Taipei increased by over 4%, Hong Kong by more than 3%, and indices in Sydney, Shanghai, Manila, Kuala Lumpur, Jakarta, Singapore, Bangkok, and Wellington also closed strongly higher. Middle Eastern stock markets also saw substantial gains. According to Bloomberg News, Dubai surged by 8.5%, marking its largest intraday gain since December 2014. Abu Dhabi's stock market rose by over 3%, its biggest gain since March. Michael Brown, an analyst at Pepperstone, Australia's largest foreign exchange trading company, stated: 'Trump and Iran have both confirmed that several proposals have been exchanged, which will pave the way for formal negotiations to achieve a more lasting peace agreement. This is also the main reason for the rebound in risk-on markets.' Stephen Innes, a strategist at SPI Asset Management, noted that this agreement is crucial for Asia, as many governments have been forced to respond to soaring energy prices in recent months. He said: 'The fall in oil prices has removed the long-standing pressure on regional market sentiment, especially for energy-importing economies that were directly affected.' (Compiled by Ho Hung-ju) 1150408