Global markets rebounded on Friday as investors bet on a fragile ceasefire between the United States and Iran, despite mounting doubts about its durability. The truce, announced on Tuesday, is set to last two weeks and would reopen the Strait of Hormuz, a critical oil chokepoint closed since the start of the conflict on February 28.
The news initially sparked euphoria, with stocks rallying across Asia and Europe. Tokyo’s Nikkei 225 closed 1.8 percent higher at 56,924.11, while Hong Kong’s Hang Seng rose 0.4 percent and Shanghai’s Composite gained 0.5 percent. London’s FTSE 100 was flat, while Paris and Frankfurt edged higher. In the United States, the Dow Jones Industrial Average climbed 0.6 percent to 48,185.80.
Oil prices extended gains, with West Texas Intermediate up 0.8 percent at $98.64 a barrel and Brent crude rising 0.7 percent to $96.57. The rally reflects lingering concerns that Israel’s continued strikes on Lebanon could derail peace efforts, as Tehran accuses Tel Aviv of violating the ceasefire.
US and Iranian delegations are due in Pakistan for talks, but differences remain over the terms of the truce and the future of the strait, through which about a fifth of global oil and gas flows. Only 10 vessels have passed since the ceasefire began, and just one was not Iranian.
President Donald Trump warned Iran against imposing tolls on ships using the strait, threatening swift US retaliation. He also claimed Tehran was failing to allow oil to flow freely, though maritime data shows limited movement.
Analysts say markets are pricing in a best-case scenario, but risks remain. “Even if the strait reopens, it will take weeks or months to clear shipping backlogs,” said Pepperstone’s Michael Brown. “Crude prices are unlikely to return to pre-war levels soon.”
The International Monetary Fund warned that the conflict’s “scarring effects” will force a downward revision of global growth forecasts, citing energy price spikes, infrastructure damage, and supply chain disruptions.
In company news, shares in Japanese retail giant Fast Retailing surged 10 percent to a record high after raising its full-year profit outlook, buoyed by strong demand for its Uniqlo brand in the US and Europe.
Investors are also awaiting US inflation data, which could signal how higher energy costs are filtering into consumer prices. Factory gate prices in China rose for the first time in over three years last month, underscoring the global economic impact.
Japan, which relies on the Middle East for 95 percent of its oil imports, plans to release an additional 20 days’ worth of crude reserves as early as next month to ease supply concerns.
