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Tentative Iran Deal Sends Stocks Higher06/15 04:46
World share prices soared Monday after a tentative deal was announced on
ending the Iran war and reopening the Strait of Hormuz, while oil prices fell
more than $4 a barrel.
BANGKOK (AP) -- World share prices soared Monday after a tentative deal was
announced on ending the Iran war and reopening the Strait of Hormuz, while oil
prices fell more than $4 a barrel.
The future for the S&P 500 was up 1.2% and that for the Dow Jones Industrial
Average gained 0.9%, auguring likely early gains for Wall Street.
In early European trading, Germany's DAX advanced 1.3% to 24,942.12, while
the CAC 40 in Paris added 1.1% to 8,444.00.
Britain's FTSE 100 gained 0.2% to 10,496.56.
After repeated false starts, investors were betting that this time, the war
might end. U.S. President Donald Trump confirmed the initial agreement and
authorized an end to the U.S. naval blockade of Iranian ports.
Iran confirmed it but signaled that implementation would not start until a
signing that Pakistan said would be held Friday in Switzerland. Broader
negotiations on issues like Iran's nuclear program are expected to continue
over the next 60 days.
In early trading Monday, the price of Brent crude oil, the international
standard, fell $4.37 to $82.96 per barrel. U.S. benchmark crude lost $4.53 to
$80.35 per barrel.
It may take months for oil prices to stabilize after the disruptions from
the war caused them to surge, pushing costs up for gasoline and many other
products. Energy experts said shipping and insurance companies will want to be
confident the pact will hold, ensuring that oil and gas supplies will flow
freely enough for the world's needs to be met.
"The reopening of Hormuz is a relief valve, not a full peace dividend. The
market can remove some crude panic, but it still has to price the gap between a
headline, a signature, and a regime that actually complies," Stephen Innes of
SPI Asset Management said in a report.
Still, the news was a huge relief for markets that have been roiled since
the conflict began in late February.
Stocks rallied in Asia, where Tokyo's Nikkei 225 gained 5% to 69,317.50 as
the benchmark logged another record high.
Buying was heaviest for technology shares, especially those related to
artificial intelligence. The boom in AI has been driving gains in Japan, where
the benchmark has gained more than 80% in the last year.
"This is great news," said Takashi Hiroki, chief strategist at Monex.
"Buying by foreign investors is leading the market with expectations of easing
tensions around the situation in the Middle East. Then the decline in New York
crude oil futures is supporting this positive market."
The Kospi in Seoul surged 5.2% to 8,545.98.
In Hong Kong, the Hang Seng gained 0.5% to 24,842.67, while the Shanghai
Composite index was up 1.6% to 4,096.47.
Australia's S&P/ASX 200 advanced 1.3% to 8,922.90. Taiwan's Taiex was up
2.8%, and the Sensex in India rose 1.2%.
On Friday, U.S. stocks advanced as Musk's SpaceX soared in its highly
anticipated debut on Wall Street.
The strong start suggested plenty of demand still exists among investors for
AI after SpaceX stock leaped 19.2% in its first day of trading. That gave Elon
Musk's rocket company a total value of $2.1 trillion, making it bigger than
Exxon Mobil, Bank of America and Coca-Cola combined. In addition to building
rockets, SpaceX also owns the artificial intelligence company xAI.
The S&P 500 added 0.5% to close out its 10th winning week in the last 11.
The Dow industrials climbed 353 points, or 0.7%, and the Nasdaq composite
gained 0.3%.
This week will bring interest rate decisions from the Federal Reserve and
Bank of England, on Thursday. On Tuesday, the Bank of Japan is due to announce
its monetary policy updates. It is widely expected to raise its benchmark
interest rate to 1% from the current 0.75%.
That would be the highest rate in more than 30 years.
In other dealings early Monday, the dollar slipped to 160.10 Japanese yen
from 160.12 yen late Friday. The euro climbed to $1.1611 from $1.1578.
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