Markets rally with US-Iran deal; SpaceX ends first week 14% up

Markets were abuzz following the listing of Elon Musk’s SpaceX on June 12 on the Nadaq.

SINGAPORE – Markets cheered the first notable steps towards a peace deal in the war between the United States and Iran, as both sides signed an agreement on June 18 that could herald the reopening of the Strait of Hormuz.

The Straits Times Index (STI) hit a 52-week high on June 18 to close at 5,212.84, having rallied strongly from 4,988 a week earlier.

However, it moderated slightly to close at 5,192.7 on June 19, after rising over 3 per cent during the week.

The US and Iran announced on June 14 that a framework for a peace deal had been put in place, including the reopening of the Hormuz, a major shipping channel for global oil and gas flows.

The effective closure of the Hormuz over the past few months has caused an energy crisis with skyrocketing oil prices past US$100 a barrel, and resulted in global inflationary pressures.

On June 18, the US released the 14-point agreement that President Donald Trump signed with Iran’s president, Masoud Pezeshkian, that would also allow ships to pass through the strait toll-free for 60 days.

Oil prices responded by falling below US$80 per barrel of Brent crude for the first time in three months.

Syfe head of investment and advisory Ritesh Ganeriwal said: “The US-Iran peace deal sent oil back to early March levels and triggered a jump in equities, with Asia rallying led by oil-dependent Korea, Japan and India.”

Japan’s Nikkei index was up nearly 8 per cent over the week to hit a high of 71,250 on June 19, while South Korea’s Kospi index jumped by 5 per cent.

However, Hong Kong’s Hang Seng Index was the outlier, falling 3 per cent over the week.

Phillip Securities research manager Glenn Thum said oil prices will still be closely watched, as a sustained pullback would ease pressure on inflation expectations and give investors more confidence around the path of interest rates. “In Singapore, that would be more helpful for companies exposed to fuel and financing costs, although the market will still need to see whether the de-escalation holds,” he said.