Following the announcement of the Strait of Hormuz’s reopening, global equity markets surged as risk sentiment increased throughout the world due to a reduction in geopolitical tensions. A decline in oil prices helped the S&P 500 and Nasdaq Composite to rise more than 1%, while the Dow Jones Industrial Average in the United States increased by almost 1.8%.
The U.S. dollar declined vs major currencies, bond yields fell, and European markets closed higher during the period, mirroring the global risk-on trend. While France’s CAC 40 and Spain’s IBEX 35 gained 1.9–2%, Germany’s DAX increased by about 2.2%. With a comparatively small increase of roughly 0.7%, the UK’s FTSE 100 also finished higher, but it was hampered by drops in oil majors as crude prices plummeted.
However, Asian markets ended the day with mixed results, indicating cautious optimism. Benchmark indices in India maintained steady, with the Nifty 50 remaining above 24,350 and the BSE Sensex showing slight increases, finishing at 78,493, both improving by about 0.6%, helped by relief for economies that import oil. While Hong Kong’s Hang Seng Index fell by roughly 0.9%, Japan’s Nikkei 225 exhibited comparatively strong resistance, falling 1.75%. The Shanghai Composite in China and the S&P/ASX 200 in Australia both slightly declined by about 0.1%, a sign of profit booking and persistent doubt about how long the ceasefire would last. Interestingly, closing prices did not immediately reflect the development because the majority of Asian markets had already closed prior to Iran’s official declaration that the Strait was “completely open” during the ceasefire.
