Global equities rally on hopes of easing Iran tensions after Trump remarks

Global equity markets staged a strong recovery after US President Donald Trump indicated that a peace agreement with Iran could be finalised within days, raising hopes of an end to tensions in the West Asia and reducing fears of further disruption to global energy supplies.

Although Iran has not confirmed a final deal as yet, US markets rebounded sharply overnight, with the benchmark S&P 500 climbing nearly 1.8 per cent to record its biggest single-day gain since April. The technology-heavy Nasdaq Composite advanced 2.5 per cent, while the Dow Jones Industrial Average rose about 1.9 per cent, snapping a three-session losing streak.

Al Jazeera reported that the positive momentum carried into Asia on Friday, with major regional markets posting significant gains as investors welcomed signs of diplomatic progress between Washington and Tehran.

South Korea's Kospi index led the rally, surging more than 8 per cent in early trade and extending its position as one of the world's best-performing major equity markets this year. Japan's Nikkei 225 jumped as much as 4 per cent, while Taiwan's TAIEX gained around 2.4 per cent. Australia's ASX 200 advanced about 1.8 per cent and Hong Kong's Hang Seng Index traded more than 1 per cent higher.

Investor sentiment improved after Trump said a settlement with Iran had effectively been reached, pending final documentation. Speaking at the White House, he suggested that a formal agreement to end hostilities could be signed as early as this weekend.

While Tehran has not publicly endorsed Trump's remarks, Iranian officials acknowledged that discussions with the United States were ongoing and that a memorandum of understanding was being considered.

The prospect of easing tensions also weighed on oil prices. Brent crude, the international benchmark, fell about 1 per cent to below $89.50 a barrel as traders priced in a reduced risk of disruption to shipping through the Strait of Hormuz, a vital route for global energy supplies.

Market participants, however, cautioned that sustained gains would depend on concrete developments.

Analysts said investors would be looking for confirmation of a formal agreement and evidence that maritime traffic through the Strait of Hormuz could return to normal before extending their bullish bets.

The latest rally has reinforced expectations that recent market weakness may have been a temporary correction rather than the beginning of a broader downturn.

According to market observers, renewed buying interest across equities suggests investors remain confident in the underlying strength of global markets, particularly if geopolitical risks continue to ease and energy prices remain contained.

The positive mood was also supported by anticipation surrounding the stock market debut of SpaceX, which is expected to be one of the largest listings in market history.

For now, investors appear focused on the possibility that a diplomatic breakthrough in the West Asia could remove one of the biggest risks facing global markets, helping equities recover after weeks of uncertainty driven by conflict and rising oil prices.