New Delhi: Global financial markets opened on a strong note on Monday after the announcement of a peace agreement aimed at ending hostilities between the United States and Iran. Investor confidence improved significantly following indications that the strategically vital Strait of Hormuz would reopen for unrestricted maritime traffic, easing concerns over global energy supplies.
Asian stock exchanges witnessed robust gains in early trading. Japan’s Nikkei index surged more than five percent to touch a fresh record high, while South Korea’s Kospi also posted impressive gains. Positive sentiment spread across other regional markets, with Taiwan and Australia recording notable advances as investors welcomed signs of geopolitical stability.
The announcement also had an immediate impact on crude oil prices. International benchmark Brent crude and US benchmark West Texas Intermediate both declined sharply, reflecting expectations of smoother oil shipments through the Gulf region and reduced supply disruptions.
US President Donald Trump stated that the agreement would pave the way for the restoration of unrestricted navigation through the Strait of Hormuz and confirmed the lifting of the American naval blockade. Pakistan also indicated that diplomatic efforts had resulted in a breakthrough and that a formal signing ceremony is expected to take place in Switzerland later this week.
Despite the optimism, analysts believe the energy market may remain cautious until the agreement is officially implemented and shipping operations return to normal. Insurance firms and cargo operators are expected to closely monitor developments before fully restoring commercial confidence in the route.
Market experts noted that the easing of tensions has removed a major source of uncertainty that had unsettled investors since the conflict began earlier this year. Technology and artificial intelligence-related stocks emerged among the biggest gainers, particularly in Japan, where foreign institutional buying accelerated.
The positive mood extended to Wall Street futures, indicating a stronger opening for US markets after gains recorded in the previous trading session. Analysts believe that if the agreement holds, it could improve global trade sentiment, stabilise energy markets and support economic growth in several regions.
While diplomatic progress has generated widespread optimism, observers point out that broader discussions, including issues related to Iran’s nuclear programme and regional security, are expected to continue over the coming weeks before a long-term settlement can be achieved.
