Asia stock markets jump on US-Iran ceasefire

Today’s headlines

What’s happening: Asian stock markets traded higher this morning following the announcement of a two-week US-Iran ceasefire.

What happened: The US and Iran reached the ceasefire agreement an hour before Trump’s deadline of 8pm ET to strike Iran’s civilian infrastructure and power plants.

Investor sentiment was lifted by Iran agreeing to reopen the Strait of Hormuz for two weeks, while negotiations are on with the US to end the conflict.

Why it matters: The Middle East conflict, which has gone on for six weeks, has claimed over 5,000 lives across almost a dozen countries. The closure of the Strait of Hormuz has driven energy prices significantly higher, exerting pressure on the global equity markets.

Around 0300 UAE time, US President Donald Trump announced to suspend strikes on Iran for two weeks as part of a ceasefire deal, provided Tehran reopens the Strait of Hormuz. Even as Trump agreed to negotiations, he continued threats of destroying a “whole civilisation” if Iran failed to reach a deal.

While committing to safe passage for vessels through the Strait of Hormuz of these two weeks, Iran said it had ordered all military units to halt counterattacks.

Pakistan’s Prime Minister Shehbaz Sharif confirmed that US and Iran delegations would meet in Islamabad on Friday. He confirmed that the ceasefire also applies to Israel’s campaign in Lebanon, although Israel refrained from confirming this.

Meanwhile, data released this morning showed that the S&P Global Hong Kong SAR PMI fell to 49.3 in March from 53.3 in the previous month, signalling the first contraction in the region’s private sector since last July 2025.

Japan’s current account surplus narrowed slightly to ¥3,932.7 billion in February from ¥3,938.4 billion in the year-ago period, but topped market estimates of ¥3,549 billion. The latest reading signalled the largest surplus since September 2025. Japan’s nominal wages surged by 3.3% year-over-year in February, topping market estimates of 2.7% growth and following a 3% gain in the previous month.

Asian markets received a significant boost from the ceasefire announcement. Japan’s Nikkei 225 jumped 5.16% to 56,185.41, Hong Kong’s Hang Seng index surged 2.7% to 25,793.46, China’s Shanghai Composite Index gained 1.92% to 3,964.72 and India’s Sensex rose 3.64% to 77,335.86.

What to watch: Investors will keep an eye on the US-Iran negotiations and any moves by Israel to ensure the success of the ceasefire.

Data on foreign bond investment (0350 UAE Time), consumer confidence (0900 UAE Time) and machine tool orders (1000 UAE Time) from Japan will be released on Thursday. Japan’s consumer confidence index, which surged to 40.0 in February from 37.9 in the previous month, is expected to decline to 38 in March. Japan’s machine tool orders, which surged by 24.2% year-over-year to ¥146,784 million in February, are expected to rise by 16% in March.

The markets today

The British pound in focus today ahead of construction PMI data

Context: The GBP/USD forex pair surged this morning following the US-Iran ceasefire announcement.

Details: Market optimism was driven by the announcement of a two-week ceasefire in the Middle East, effective immediately. The agreement includes the suspension of attacks by the US and Israel on Iran, while Tehran has assured safe passage to vessels through the Strait of Hormuz.

Data released on Tuesday showed that the S&P Global UK services PMI fell to 50.5 in March from a flash reading of 51.2. The figure also came in below February’s reading of 53.9. The S&P Global composite PMI was revised lower to 50.3 in March from the preliminary reading of 51 and below 53.7 in the previous month. This signalled the slowest growth in business activity in six months.

New car registrations in the UK climbed 6.6% year-over-year to 380,627 units in March, which is generally the strongest market month of the year. This marked a slowdown from February’s 7.2% growth.

Weakness in the US dollar lent further support to the GBP/USD pair this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, dipped around 0.9% to 98.98.

The GBP/USD forex pair jumped around 0.8% to 1.3398 this morning.

What to watch: Investors will continue monitoring developments around the talks between Washington and Tehran, slated to begin on Friday.

Data on UK’s S&P Global construction PMI (1230 UAE Time) will be released today. The S&P Global UK construction PMI, which declined to 44.5 in February from 46.4 in the previous month, is expected to fall further to 43.9 in March.

Other Markets: US trading indices closed mixed on Tuesday, with the S&P 500 and Nasdaq 100 up by 0.08% and 0.04%, respectively, and the Dow Jones index down by 0.18%.

The news shaping the markets

Aerial drone attacks by Ukraine forced a major Russian oil terminal to halt operations. The news sent the USD/RUB pair higher in forex trading this morning.

The Reserve Bank of New Zealand kept its official cash rate unchanged at 2.25%, in-line with market estimates, lending support to the NZD/USD forex pair.

Philippines’ unemployment rate eased to 5.1% in February from 5.8% in the previous month, which sent the USD/PHP pair lower in forex trading this morning.

South Korea’s current account surplus rose to $23.19 billion in February from $13.26 billion in the previous month. This being the largest monthly surplus on record exerted pressure on the USD/KRW forex pair.

Brazil’s trade surplus narrowed 17.2% year-on-year to $6.40 billion in March, as imports surged 20.1% to $25.20 billion, which sent the USD/BRL pair higher in forex trading this morning.

What else to watch today

Eurozone’s retail sales (1300 UAE Time), PPI (1300 UAE Time), US MBA mortgage applications (1500 UAE Time), EIA crude oil stocks change (1830 UAE Time), EIA gasoline stocks change (1830 UAE Time) and FOMC minutes (2200 UAE Time), India’s M3 money supply (1530 UAE Time) as well as Mexico’s consumer confidence (1600 UAE Time).