HONG KONG: Global stock markets mostly advanced on Tuesday while oil prices remained subdued as investors continued to welcome the US-Iran peace agreement that is expected to reopen the Strait of Hormuz, a vital artery for global energy supplies.
Market sentiment remained positive after a strong rally on Monday triggered by the announcement of a framework agreement aimed at ending more than three months of conflict between the United States and Iran.
Investors are now focused on the formal signing ceremony scheduled for Friday in Geneva, where both sides are expected to finalize the agreement and outline the next phase of negotiations.
US President Donald Trump said shipping traffic had resumed through the Strait of Hormuz and that the waterway would be fully operational by the end of the week. Iranian media also reported that several oil tankers and cargo vessels had successfully transited the strategic route.
The Strait of Hormuz, which carries a significant portion of global oil exports, became a focal point of the conflict after Iran imposed restrictions on maritime traffic following the outbreak of hostilities in February.
Financial markets responded positively to signs of easing geopolitical tensions. Major global equity indexes extended gains after Wall Street’s rally pushed the Dow Jones Industrial Average to a record high during the previous session.
Oil prices, which fell sharply on Monday amid expectations of restored energy flows, remained largely stable on Tuesday as traders assessed the pace at which exports and production could return to normal levels.
Analysts said investors are increasingly betting on a sustained improvement in geopolitical conditions, although uncertainty remains over the implementation of the agreement and the timeline for fully restoring energy supplies.
In Asia, South Korean stocks led regional gains, supported by continued strength in technology shares. Markets in Shanghai, Singapore, Taipei, Wellington and Manila also closed higher, while Tokyo, Hong Kong and Sydney ended lower.
Investors largely shrugged off data showing a contraction in Chinese retail sales, instead focusing on broader market optimism and expectations surrounding monetary policy decisions.
Attention is also centered on the Bank of Japan, which is widely expected to raise interest rates later on Tuesday, potentially marking the highest borrowing costs in Japan in more than three decades.
Despite improving market sentiment, shipping companies and energy analysts warned that disruptions to global supply chains may take time to fully unwind, with some cautioning that normal shipping operations through the Strait of Hormuz may not resume immediately.
Markets are expected to remain sensitive to developments ahead of Friday’s signing ceremony, with investors closely monitoring implementation of the agreement and progress toward restoring regional stability.