Asian Markets Stable Amid US-Iran Peace Deal Hopes, Oil Prices Dip

Washington DC. Asian share markets were stable on Thursday with hopes that the ongoing war in West Asia will end following the signing of an interim peace agreement between the Presidents of the United States and Iran, while crude oil prices have fallen.

However, clouds of uncertainty have not completely cleared from the market yet.

Both countries have released the official text of the agreement, which was already widely publicized. This agreement has extended the ceasefire announced in April for another 60 days, which will give both parties time to negotiate a permanent peace agreement.

Despite peace efforts, US President Donald Trump has threatened to resume attacks and kill Iranian officials if Iran does not fulfill its commitments. According to Kyle Rodda, a senior financial market analyst at Capital.com, major geopolitical risks still remain and will continue to play a key role in driving market activity.

Meanwhile, MSCI Asia-Pacific ex-Japan broad share index remained stable. However, Japan's Nikkei share average set another new historical record, crossing the 71,000 mark for the first time.

The Nikkei reached this height after strong growth in shares related to semiconductors and artificial intelligence (AI). Similarly, the South Korean stock market also saw a 0.9 percent improvement, while US stock futures (S&P 500 E-mini) rose 0.81 percent to 7,484.8 points.

Elsewhere, the yield on Japan's benchmark 10-year government bond rose 2 basis points to 2.620 percent, its highest closing point since June 16. Oil prices have fallen, with US crude oil down 1.25 percent to $75.83 per barrel and Brent crude down 1.4 percent to $78.41 per barrel.

Earlier, all three major indices on the US stock market Wall Street had fallen by 1 percent or more. Investors were shaken after new Federal Reserve Chairman Kevin Warsh emphasized the need to control inflation and other policymakers projected interest rate hikes later this year.

As a result, the Dow Jones Industrial Average closed down 507.12 points, or 0.98 percent, at 51,492.55. The S&P 500 index fell 91.25 points to 7,420.10, and the Nasdaq Composite fell 354.69 points to 26,021.66.

Amid expectations of rising interest rates, the yield on the 10-year US Treasury note rose to 4.471 percent. Similarly, the yield on the 2-year bond also rose to 4.1759 percent. The Bank of England is also meeting on Thursday, but like the Fed, it is expected to make no changes to interest rates. Therefore, market attention is focused on the policymakers' comments.

In the currency market, the dollar is strengthening. The dollar rose 0.01 percent against the Japanese yen to 160.65, its highest level since July 2024. The dollar index, which measures the dollar's value against other major currencies, fell 0.03 percent to 100.32. The euro rose 0.1 percent to $1.1511.

The recent fall in oil prices has somewhat eased concerns about an economic recession, especially for European countries dependent on energy imports. The International Energy Agency released a report on Wednesday stating that the oil market, struggling after the closure of the Strait of Hormuz, will reach a state of large supply surplus by 2027.

At the latest market price, gold is trading at $4,309.75 per ounce. Similarly, in cryptocurrency, Bitcoin rose 0.16 percent to $64,464.75, while Ethereum is trading at $1,752.54 with a 0.37 percent increase.