Precise Investors Editorial Team
MSCI’s broadest index of Asia-Pacific shares outside Japan rose nearly 1.5%
Asian stocks jumped to their highest level in six weeks on Wednesday and oil prices extended their decline below $100 a barrel after the U.S. said its peace talks with Iran could resume within days, calming markets rattled by weeks of war-driven volatility.
The U.S. president said negotiations could restart in the next two days after weekend talks collapsed, prompting U.S. to attempt a blockade on Iranian ports.
Iran also said that negotiations could restart.
The signs of renewed diplomatic engagement pushed Brent crude futures down 0.7% to $94.13 a barrel, having already plunged nearly 5% overnight.
Stock markets also responded positively. MSCI’s broadest index of Asia-Pacific shares outside Japan rose nearly 1.5%, Nikkei jumped 1.2% to 58,561, closing in on its record high of 59,332 from late February, and Hang Seng added 1.2%. Chinese blue-chips advanced 0.5%.
The impressive price action in risk assets suggests markets are keen to look through the immediate impact of the Middle East conflict, Tony Sycamore, an analyst at IG told Reuters. There is a growing expectation that the standoff will soon be resolved, allowing the US administration to pivot towards declaring victory, before stimulating the economy ahead of the midterms.
Overnight on U.S. stock market, Nasdaq jumped 2% to chalk up its 10th straight day of gains and the S&P 500 hovered near a record closing high.
The US dollar steadied after dropping for seven straight sessions, with the euro holding at $1.1791 having hit a six-week high of $1.1811 overnight.
Gold rose 0.1% to $4,846 an ounce. Investor optimism also supported US Treasuries, which had been under pressure from inflation concerns, with the 10-year yield coming down to 4.2439%.
But with the Strait of Hormuz still effectively shut to oil traffic, the International Monetary Fund on Tuesday lowered its global growth outlook and warned the world economy could reach the brink of recession if the war worsened.
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