Markets rally and energy prices fall after US-Iran peace deal

Global markets rose sharply on Monday after the United States and Iran announced a framework agreement to end the war in the Middle East.

European stock markets opened higher, with Frankfurt and Paris both gaining around 1.7 per cent and London rising 0.8 per cent. The pan-European Stoxx Europe 600 index climbed 1.3 per cent to a record high. Brussels’ Bel20 gained around 0,6 per cent.

Asian markets also surged. Japan’s Nikkei index jumped 5 per cent to a new record, while South Korea’s Kospi index gained more than 5 per cent.

Energy prices fell as traders welcomed the prospect of the Strait of Hormuz reopening. Brent crude oil dropped more than 4 per cent to around 83.5 dollars a barrel, while US crude fell 5 per cent.

European natural gas prices also declined by around 5 per cent. The Strait of Hormuz is a key route not only for oil shipments but also for liquefied natural gas exports.

Investors hope the agreement will reduce tensions in the Middle East, ease pressure on global energy supplies and support economic growth.

^{Illustration © AFP PHOTO / ERIC PIERMONT}