Global Markets Post Strong Gains After U.S.-Iran Ceasefire

(MENAFN) World stock markets staged a sweeping relief rally on Wednesday after Tehran and Washington agreed to a two-week ceasefire, igniting a broad surge in investor confidence and sharply reducing fears of a sustained energy supply shock and inflationary spiral.

Crude oil prices tumbled on the back of the announcement, providing the principal fuel for gains across global equity markets.

European bourses led the charge. The pan-European Stoxx Europe 600 advanced 4.02% to 614.34 points as of 1410 GMT, putting it on course for its strongest single-day performance in over a year, while Germany's DAX 40 surged 4.94% to 24,053.46. In London, the FTSE 100 climbed 2.61% to 10,619.37 — its highest reading in roughly a month — as investors welcomed the temporary reprieve from Middle East tensions.

Across Asia, the rally was equally robust. Japan's Nikkei 225 vaulted 5.39% to 56,308.42, while the Asia Dow Index gained 4.11% to reach 4,562.76, reflecting a sweeping regional rebound driven in large part by the prospect of lower energy costs for major oil-importing economies.

The momentum carried through to Wall Street. The Dow Jones Industrial Average rose approximately 2.74% to 47,861.19, the S&P 500 added 2.35% to 6,773.65, and the Nasdaq climbed 2.83% to 22,639.921.

The catalyst was a ceasefire agreement reached just ahead of a US-imposed deadline tied to the Strait of Hormuz — a pivotal chokepoint through which a significant share of the world's oil and gas transits daily. Markets interpreted the truce as materially reducing the near-term probability of a wider regional conflagration.

However, analysts struck a note of caution, warning that the accord remains inherently fragile and that lingering uncertainty over shipping lanes and energy flows has yet to fully dissipate — leaving markets vulnerable to renewed volatility should the truce show signs of collapse.

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