World shares advanced on Friday, while oil prices sank more than 4 per cent after US President Donald Trump claimed there was a breakthrough in talks to end the Iran war.
Expectations that an agreement between the US and Iran may help reopen the strait sent oil prices tumbling.
In share trading, the future for the S&P 500 was 0.2 per cent higher, while that for the Dow Jones Industrial Average was up 0.4 per cent.
Investors in the US and elsewhere were awaiting the debut Friday on Wall Street of SpaceX, Elon Musk’s rocket company, which is set to become the largest initial public offering (IPO) on record, raising around $75 billion.
Asian markets logged bigger gains. South Korea’s Kospi jumped 4.6 per cent to 8,123.62, narrowing losses from earlier this month from sell-offs of shares related to artificial intelligence. The Kospi has nearly doubled over the past six months, with a record closing high of 8,801.49 on June 2.
Samsung Electronics advanced 7.9 per cent. Computer chipmaker SK Hynix rose 2.3 per cent.
Tokyo’s Nikkei’s 225 gained 2.8 per cent, also led by gains for technology stocks. SoftBank Group, a multinational investment holding company with a strong AI focus, was up 1.5 per cent. Chip equipment maker Tokyo Electron jumped 7.3 per cent.
Hong Kong’s Hang Seng gained 1.9 per cent to 24,658.91 and the Shanghai Composite index rose 1.1 per cent to 4,031.51. Taiwan’s Taiex gained 2.4 per cent, while Sensex advanced 1.4 per cent.
The renewed investor optimism came after Trump said Thursday he had called off military strikes against Iran. He asserted that the U.S. had made “a great settlement of the war with Iran,” adding that an extension of the shaky ceasefire between the two sides could be finalized in “the next few days.” Few details were offered.
Global markets retreated earlier in the week as tensions between the US and Iran escalated.
“Trump has said many times before that a deal is very close, only for hostilities to resume,” ING commodities analysts Warren Patterson and Ewa Manthey wrote in a note on Friday. “However, there does appear to be more positive noise around the deal this time.” “(But) we would be cautious about assuming that the extension of the ceasefire is a done deal,” they added. “Even if it is, it could be fragile.” On Thursday, Wall Street’s benchmark S&P 500 surged 1.8% to 7,394.30, back to where it was in early May. The Dow Jones Industrial Average rallied 1.9% to 50,848.75, and the technology-heavy Nasdaq composite climbed 2.5% to 25,809.66.
Prices of AI and other tech stocks have been volatile the past week in part due to renewed worries that massive investments and soaring share prices are creating a bubble liable to burst. On Thursday, US chipmaker Marvell Technology climbed 11.1%, but technology company Oracle lost 8.5% on worries over its high spending, despite strong-than-expected quarterly results.
