Stocks soared, bonds rallied and the Dollar wallowed on Wednesday, as hopes of a de-escalation in the Iran conflict fuelled the biggest rebound in regional equities in more than three years.
Europe’s STOXX 600 surged 2.3% in early trade, on track for its biggest daily jump in a year, as travel stocks rose about 4% and aerospace and defence stocks were 3.6% higher.
German bund yields fell 7 basis points .
Morgan Stanley Capital International’s broadest index of Asia-Pacific shares outside Japan rose 4.7%, snapping a four-day losing streak to log its biggest one-day increase since November 2022, after President Donald Trump said the United States could end its military attacks on Iran in two to three weeks.
“They’re still quite far apart in terms of what a truce means, or what peace means, but the market is embracing the fact that they are talking,” said Rodrigo Catril, currency Strategist at National Australia Bank in Sydney.
“That’s a positive sign, at least in terms of signalling or willingness to end the conflict,” he said, speaking on a podcast. Whether a compromise can be reached remains to be seen. “While this is all happening, attacks are continuing from both sides.”
Robust economic data for March powered a rebound in Korean and Japanese shares. South Korea’s Kospi led gains, rising as much as 9.1%, while the Nikkei 225 surged 5.2%, and Taiwanese shares gained 4.6% at the highs of the day.
The rally shrugged off a report in the Wall Street Journal that the United Arab Emirates may enter the conflict, opens new tab and is lobbying for a United Nations Security Council Resolution to authorise it to take part in military action to force open the Strait of Hormuz.
–Reuters–
