On Monday (15 June, 9:13 AM, GMT+7, Bangkok time), major indices in the Asia Pacific increased, with Japan’s Nikkei and South Korea’s Kospi surging by 5%. This is buoyed by signs that tensions in the Middle East could soon ease following an agreement between the United States and Iran. The prospect of peace in the region has drawn investor interest, with anticipation of a reduction in the risk premium attached to crude oil prices.
Iran and the United States have reached a consensus to cease all military actions, according to a statement from Pakistani Prime Minister Shehbaz Sharif. He noted that the official signing of the agreement is planned for Friday, June 19, in Switzerland, with Pakistan acting as a mediator for the talks.
President Donald Trump confirmed the completion of the peace agreement with Iran, stating in a social media message that the Strait of Hormuz will reopen to global shipping, free from tolls, and the U.S. will end its naval blockade. He encouraged international shipping to resume, emphasizing the return of oil flows from the region.
Expectations for normalized oil shipments through the Persian Gulf have contributed to optimism in financial markets, as a removal of the geopolitical risk premium could provide relief from upward pressure on global inflation.
Josh Gilbert, Asia Pacific and Middle East lead analyst at eToro Ltd., observed that market participants have been looking for progress on this front for months, with early signs of optimism now evident in trading. Nonetheless, the sentiment remains cautious until the agreement is formally finalized.
Japan’s NIKKEI surged 5.44% to 69,610.82. South Korea’s KOSPI soared by 5.38% to 8,561.07, and Australia’s ASX 200 rose by 1.38% to 8,925.10.
As for stocks in China, Shanghai’s SSEC expanded by 1.28% to 4,083.29. Shenzhen’s SZI grew by 1.94% to 15,253.80, and Hong Kong’s HSI escalated by 1.10% to 24,989.10.
The U.S. stock markets edged up on Friday as the Dow Jones Industrial Average (DJIA) added 0.70% to 51,202.26. NASDAQ gained 0.31% to 25,888.84, and S&P 500 advanced by 0.50% to 7,431.46. VIX slumped by 9.05% to 17.68.
As for commodities, oil prices settled lower on Friday amid growing optimism over a potential peace deal between the United States and Iran. Brent finished the session at $87.33 per barrel, marking a decline of $3.05, or 3.37%. U.S. West Texas Intermediate (WTI) crude ended at $84.88, dropping $2.83, or 3.23%.
Downward momentum continued early Monday after the U.S. and Iran revealed that they had reached initial accords, with a formal signing scheduled for Friday. Brent futures contracted $3.42, or 3.92%, to $83.91 per barrel, and the WTI futures lost $4.02, or 4.74%, to $80.86 per barrel.
Meanwhile, gold futures surged 2.49% to $4,344.50 per Troy ounce.
