Precise Investors Editorial Team
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.5%
Share markets rallied in Asia on Monday as a pause in fighting in the Gulf dragged oil prices lower, easing inflation risks and boosting bonds ahead of a packed week of central bank meetings and earnings reports.
Iran said on Sunday it would halt its own attacks as long as the U.S. did the same, with the U.S. concerned about dwindling supplies of ammunition.
Yet, Yemen’s Houthis had still attacked Saudi oil installations along the Red Sea coast, threatening another waterway vital to the world oil trade.
Net, it looks as if developments in the Middle East have moved in a positive direction over the weekend, adding some credibility to the notion that oil above $100 a barrel seems to induce de-escalatory behaviour from both sides, said Sally Auld, group chief economist at NAB.
The lull in fighting over the Strait of Hormuz saw Brent crude drop 4.7% to $92.27 a barrel.
Nikkei rose 0.2%, while South Korea’s chip-heavy index added 0.2%. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.5%.
Chinese blue chips added 0.3% as chipmaker CXMT Corp soared 500% in its Shanghai trading debut after raising $8.6 billion in Asia’s biggest initial public offering this year.
Elsewhere, equities took comfort in the drop in oil and yields, sending U.S. S&P 500 futures up 0.8%, while Nasdaq futures climbed 1.3%.
In Europe, EUROSTOXX 50 futures added 0.8%, while DAX futures advanced 0.9% and FTSE futures rose 0.2%.
The Bank of England holds its meeting on Thursday and the Bank of Japan on Friday, and both are expected to hold steady while remaining cautious about inflation risks ahead.
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