Asian equity markets remained stable, while oil prices experienced a slight decline on Thursday as investors considered the recent developments regarding the ongoing conflict in the Middle East. This comes on the heels of an interim peace agreement signed by the presidents of the United States and Iran, although lingering uncertainties continue to affect market sentiment.
The details of the agreement, which had been circulating prior to its official release, extend the previously announced ceasefire from April by an additional 60 days. This extension aims to facilitate further negotiations aimed at achieving a lasting peace settlement.
Nonetheless, U.S. President Donald Trump issued a warning, threatening renewed military action and potential harm to Iranian officials if the terms of the agreement are not upheld.
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“Significant geopolitical risks remain and will continue to influence market dynamics,” commented Kyle Rodda, a senior market analyst from Capital.com.
The MSCI Asia-Pacific index, which excludes Japan, remained unchanged. In contrast, Japan’s Nikkei index soared to a new record, surpassing the 71,000 mark for the first time, driven by strong performances in semiconductor and artificial intelligence sectors. South Korean stocks also saw an increase of 0.9%. Meanwhile, U.S. stock futures indicated a positive outlook, with S&P 500 e-minis rising by 0.81% to 7,484.8.
The yield on Japan’s benchmark 10-year government bonds increased by 2 basis points to 2.620%, nearing its highest closing level since mid-June, after peaking at 2.63% earlier in the day.
Oil prices dropped, with U.S. crude falling by 1.25% to $75.83 per barrel, while Brent crude decreased by 1.4% to $78.41 per barrel.
On Wall Street, all three major stock indexes declined by approximately 1% or more, as investors anticipated a potential interest rate hike from the Federal Reserve. This speculation was fueled by comments from the new Fed Chair, Kevin Warsh, about the necessity of controlling inflation, alongside indications from other policymakers regarding future interest rate increases.
The Dow Jones Industrial Average decreased by 507.12 points, or 0.98%, closing at 51,492.55. The S&P 500 fell by 91.25 points, or 1.21%, to finish at 7,420.10, while the Nasdaq Composite dropped 354.69 points, or 1.34%, ending at 26,021.66.
The yield on the 10-year U.S. Treasury notes rose to 4.471%, compared to Wednesday’s closing rate of 4.463%. The 2-year yield, which responds to market expectations for higher rates, reached 4.1759%, up from a U.S. close of 4.163%.
The Bank of England is set to convene on Thursday, with no rate changes anticipated. Attention will be on the statements from policymakers regarding future monetary policy.
The U.S. dollar increased slightly by 0.01% against the yen, reaching 160.65 after hitting a high of 160.79 overnight, marking its strongest position since July 2024. The dollar index, which evaluates the currency against a variety of others including the yen and euro, dipped by 0.03% to 100.32. The euro saw a minor increase of 0.1%, priced at $1.1511.
Recent declines in oil prices have alleviated some concerns about a potential economic slowdown, particularly in energy-importing regions of Europe. The International Energy Agency noted on Wednesday that the oil market is projected to experience a significant supply surplus by 2027, following a recovery from disruptions in the Strait of Hormuz.
In the commodities market, spot gold was trading at $4,309.75 per ounce.
In the realm of cryptocurrencies, bitcoin saw a slight increase of 0.16%, reaching $64,464.75, while Ethereum climbed by 0.37% to $1,752.54.
Source: Financial Chronicle Biz English | Sri Lanka Business News.
