Oil prices fell on Monday on optimism over US-Iran peace talks, with brokers marking a “roadmap” to a final deal, while most stocks rose thanks to another healthy start for technology firms.
After a meeting scheduled for Friday was canceled due to fighting between Israel and Hezbollah, negotiations finally began on Sunday in Switzerland with teams led by US Vice President JD Vance and Iran’s Mohammad Bagher Ghalibaf.
Traders remained in good spirits after news that the two foes had ended their conflict, which had driven up energy costs and fueled inflation, sending tremors through the global economy.
There were initial concerns after reports that Iran had called off the talks over US President Donald Trump’s threat to carry out more attacks if Hezbollah continued to attack Israel, but mediators Pakistan and Qatar said the talks took place in “a positive and constructive atmosphere”.
The situation improved after Qatar and Pakistan announced progress aimed at addressing Tehran’s nuclear program and reopening the Strait of Hormuz, through which a fifth of oil and gas flows.
The two said the United States and Iran agreed to establish a “line of communication” to avoid incidents in the crucial waterway, and “the High Level Committee has agreed on a roadmap toward reaching a final agreement within 60 days, laying the groundwork for the immediate start of further technical talks.”
Iranian Foreign Minister Abbas Araghchi added to X that “mediation has brought great progress to end the Lebanon War.”
Both major oil contracts fell in early trade, while most stock markets advanced.
Tokyo climbed two percent, Seoul rose more than one percent and Taipei rose 2.7 percent.
The gains came after another rally in technology firms, particularly chipmakers, including South Korea’s SK hynix, Taiwan’s TSMC and Japan’s Advantest.
Sydney, Wellington and Jakarta also advanced, although there were losses in Hong Kong, Shanghai and Singapore.
“After last week’s positive response to reports of a US-Iran ceasefire, markets are likely to open on a cautious tone to start the new week as it remains clear that the situation in the Middle East remains fragile,” National Australia Bank’s Skye Masters said.
“The dollar is likely to remain supported, the price of oil may fluctuate either way, but at current levels the risk is for a higher rise.”
Sterling remained under pressure after suffering a sell-off following Thursday’s election of UK Labor politician Andy Burnham, which raised expectations that he would oust embattled Prime Minister Keir Starmer.
The distraught prime minister “is expected to announce on Monday that he will resign as prime minister after overwhelming pressure from Labor MPs to make way for Andy Burnham”, Britain’s Guardian newspaper said.
Investors were nervous that Burnham might introduce new spending plans that would add to the nation’s already huge debt pile.
– Key figures around 0230 GMT –
West Texas Intermediate: DOWN 0.5 percent to $75.47 a barrel
Brent North Sea crude: DOWN 1.5 percent to $79.38 a barrel
Tokyo – Nikkei 225: Up 2.0 percent to 72,648.47 (interval)
Hong Kong – Hang Seng Index: DOWN 1.4 percent to 23,597.25
Shanghai – Composite: DOWN 0.1 percent at 4,088.17
Seoul – Kospi: UP 1.3 percent to 9171.14
EUR/USD: DOWN at $1.1462 from $1.1464 on Friday
Pound/dollar: UP at $1.3220 from $1.3218
Dollar/yen: UP to 161.54 yen from 161.27 yen
Euro/pound: DOWN to 86.71 pence from 86.73 pence
