Equities rallied and oil dropped as US diplomatic efforts fueled cautious optimism that the Middle East conflict may begin to ease, tempering concerns over prolonged disruption.
Brent crude slid 3.9% to $100.37 a barrel, underpinning a 1.8% advance in Asian equities and gains in sovereign bonds, as the prospect of easing tensions in Iran tempered inflation risks and damped expectations for policy tightening.
Some of the optimism eased as the European session approached. Brent had earlier dipped to as low $97.15 and Asian shares had risen as much as 2.4%.
Equity-index futures for the US advanced, while contracts pointed to about 1% gain in European shares at the open. Fueling the mood was a 15-point US plan intended to help bring the war with Iran to a close.
Earlier, Israel’s Channel 12 reported that Washington was seeking a one-month ceasefire. Even so, attention stayed fixed on the Strait of Hormuz — a vital artery for Middle East oil flows — that remains effectively closed for ships.
