Asian stocks surge and oil falls after US-Iran deal confirmation

Asian equity markets rose sharply on Monday after Washington and Tehran confirmed a deal to end hostilities and reopen the Strait of Hormuz. The move came as investors reacted to the prospect of lower geopolitical risk to energy supplies and a possible easing of pressure on global inflation. Brent crude fell in response, while US stock futures also moved higher.

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Japan's Nikkei 225 benchmark index rose 5.5% in morning trading, while South Korea's Kospi climbed as much as 5.7%. Taiwan's Taiex gained as much as 2.7%, and Australia's ASX200 rose about 1.5%. In Hong Kong, the Hang Seng Index was up about 1% before giving back much of those gains later in the morning.

Brent crude, the main global oil benchmark, fell about 4.5% to below $83.40 a barrel. The market reaction followed confirmation of the agreement after earlier signs that a deal was close. A market strategist cited in the supplied material said the confirmation prompted a further rally, after traders had already responded late last week to comments indicating progress.

The same source said the fall in oil prices could ease concerns for central banks about the inflation outlook. Attention is now turning to the US Federal Reserve, which is due to decide on interest rates this week. The deal matters because the Strait of Hormuz is one of the world's most important shipping routes for oil.

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Any reopening of the waterway and removal of the naval blockade would be expected to reduce the immediate risk premium built into energy prices. That, in turn, can affect inflation expectations, central bank policy, and broader risk appetite across global markets. The reaction in Asia also shows how quickly financial markets can reprice geopolitical developments that affect trade and energy flows.

According to the supplied material, US President Donald Trump announced the ceasefire deal in a social media post on Sunday and said he had authorised the reopening of the Strait of Hormuz and the removal of the US naval blockade of Iranian ports. Iran's Supreme National Security Council and Deputy Foreign Minister Kazem Gharibabadi later confirmed that the sides had reached a deal. Pakistani Prime Minister Shehbaz Sharif, whose government helped broker the agreement, said an official signing ceremony would take place in Switzerland on Friday.

Several details remain unconfirmed, including the full terms of the agreement and how quickly any shipping changes will be implemented. The supplied material says the deal may include an immediate cessation of hostilities on all fronts, including Lebanon, and the suspension of sanctions on Iranian oil sales, but those points have not been officially confirmed. Markets will be watching for further statements from the parties involved, the planned signing ceremony, and any signs that shipping through the Strait of Hormuz resumes as expected.

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