Global Stocks Rise Amid Bets on the End of the Iran War

SadaNews Economy - Global stocks are witnessing a notable rise driven by optimism regarding the resumption of talks between the United States and Iran to end the war, as several major markets have managed to erase the losses incurred since the onset of the conflict in the Middle East.

The "CSI 300" index in China has become the latest index to recover its losses since the outbreak of the conflict in late February, joining Taiwan and Singapore.

U.S. stock indices had already regained those levels, with the "S&P 500" index nearing its all-time high recorded in late January.

Optimism over the possibility of the U.S. and Iran entering into further negotiations is also keeping oil prices below $100 per barrel.

Market sentiments have improved with expectations that a decrease in tensions in the Middle East, following more than a month of fighting, will ease oil prices and inflation, supporting economic growth.

The U.S. and Iran are seeking to hold a second round of talks in the coming days, as tensions in the Strait of Hormuz deepen the global energy crisis, ahead of a ceasefire expiration next week.

Anna Wu, multi-asset strategist at VanEck Associates, stated, "Markets are raising their risk appetite with the resumption of talks between the U.S. and Iran." She added, "The sustainability of this risk-on sentiment may need to be tested, given the volatile nature of peace talks."

The recovery of Asian markets, which were among the most affected by the Iran war, indicates that investors are becoming more confident in the likelihood of easing tensions in the Middle East. In a sign of optimism, the offshore yuan rose for the eighth consecutive day on Tuesday.

The "MSCI Asia-Pacific" stock index rose by 1.1% on Wednesday. South Korea led the gains, with its benchmark index, the second-best performer in the world this year, jumping by 3.1%.

Brent crude prices fluctuated, rising by 0.4% to $95.14 per barrel, after previously dropping to $93.93, following U.S. President Donald Trump's statement in an interview with Fox News that he sees the war nearing its end.

Elsewhere, gold fell to about $4830 per ounce. U.S. Treasury bonds maintained their gains as falling oil prices eased inflationary pressures, while the Bloomberg dollar index saw little change after seven days of decline.

Trump stated that talks could resume "within the next two days" in Pakistan, according to the New York Post, following a lengthy but inconclusive session in Islamabad on Saturday evening.

However, the U.S. continued to impose a naval blockade on the Strait of Hormuz to limit Iranian oil exports, as the battle for control of this strategic passage intensifies.

Josh Gilbert, a market analyst at eToro, said, "This has been a volatile period for investors, and the markets continue to test their patience." He added, "What is clear is that investors have become more resilient over the past weeks and more accustomed to dealing with these environments rather than simply reacting to them."

Garfield Reynolds, head of Bloomberg Markets Live in Asia, noted that "Asian stock indicators are gearing up to join their American counterparts by recovering or exceeding the levels they recorded before the U.S.-Iran conflict."

He added that "the resilience of earnings expectations plays a key role, and stock recovery will gain momentum as long as corporate outlooks show limited impact from the largest energy shock of modern times."

Traders are also focusing on first-quarter earnings as the war in the Middle East impacts economic prospects. Shares of JPMorgan Chase fell despite reporting record trading revenues for the quarter, while Citigroup shares rose after posting the highest quarterly return on tangible common equity in five years.

BlackRock attracted net flows of $130 billion from client funds during the first quarter, with investor money continuing to flow despite turmoil in public and private markets and ongoing uncertainty regarding the Iran war. Shares of the company rose by 3%.

Scott Helfstein, head of investment strategy at Global X ETFs, stated, "Companies continue to show remarkable resilience in the face of supply chain challenges, tariffs, and now energy." He added, "This should be reassuring for investors."