Asian markets saw a predominantly upward trend on Friday, driven by anticipation of an agreement between the United States and Iran to prolong their ceasefire by an additional 60 days.
Oil prices experienced a decline amid optimism surrounding a potential easing of tensions, although they remain elevated compared to pre-conflict levels, given the continued partial closure of the Strait of Hormuz. Analysts advise caution regarding the ceasefire extension, noting that a recovery in oil supply will require time.
In the United States, futures experienced a slight downturn.
Meanwhile, Japan’s Nikkei 225 surged by 1.8%, reaching 65,814.96, following reports that Tokyo’s core inflation rate for May increased at a slower pace than economists had anticipated.
South Korea’s Kospi also saw significant gains, rising by 2.3% to hit 8,369.81.
Both indices are currently trading near their record highs.
Hong Kong’s Hang Seng added 0.4% to 25,098.68, while the Shanghai Composite index fell 0.2% to 4,092.22.
Australia’s S&P/ASX 200 was up 1% at 8,681.80.
Taiwan’s Taiex was trading 2.3% higher.
On Thursday, negotiators from the U.S. and Iran reached a tentative deal on extending their ceasefire and holding a new round of talks on Iran’s nuclear program, a U.S. official said. Iran had not yet publicly confirmed the deal and the tentative agreement was still pending U.S. President Donald Trump’s sign off.
Brent crude, the international standard, slipped 0.8% early Friday to $91.97 a barrel. It was trading around $70 per barrel in late February before the war began. Benchmark U.S. crude lost 1.2% to $87.85 per barrel.
Investors are also closely watching for a reopening of the Strait of Hormuz. The U.S. official said the tentative accord makes it clear that Iran wouldn’t be able to impose tolls on ships transiting the strait, while the U.S. would gradually lift its sea blockade on Iranian ports.
“The oil market continues to edge lower amid growing optimism that the U.S. and Iran are moving toward a deal,” ING commodities strategists Warren Patterson and Ewa Manthey wrote Friday. “A reopening of the strait would offer some immediate relief to the oil market with tankers leaving the Persian Gulf. However, the recovery is still uncertain.”
Shipowners may be reluctant to send vessels into the Persian Gulf, at least initially, over fears that the ceasefire could fail, they wrote. Also a recovery in oil and gas production would likely also be gradual rather than immediate.
On Thursday, Wall Street pushed to more records with the benchmark S&P 500 setting another all-time high, climbing 0.6% to 7,563.63. The Dow Jones Industrial Average added less than 0.1% to 50,668.97, and the technology-heavy Nasdaq composite gained 0.9% to 26,917.47.
Shares of discount retail chain Dollar Tree surged 17.9% after it reported stronger-than-expected profit, while department store retailer Kohl’s jumped 20.6%, also after better-than-anticipated results.
In other dealings early Friday, the U.S. dollar rose to 159.30 Japanese yen from 159.24 yen. The euro was trading at $1.1646, down from $1.1651.
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AP Business Writer Stan Choe contributed to this report.
