Hong Kong, mainland China stocks surge as US-Iran deal drives crude to 3-month low
US President Trump says the Strait of Hormuz would reopen on Friday after a deal with Iran, sending oil prices tumbling
The Hang Seng Index rose 0.5 per cent to 24,842.67 at the close. The Hang Seng Tech Index gained 1.3 per cent. On the mainland, the CSI 300 Index climbed 2.4 per cent.
The Strait of Hormuz would reopen on Friday upon the signing of the deal with Iran, US President Donald Trump said in a post on Truth Social, paving the way for the normalisation of oil flows through the marine corridor. The US and Iran would sign the deal on June 19 in Switzerland, according to Pakistani Prime Minister Shehbaz Sharif. The agreement would give the two sides a 60-day window to address remaining issues, including neutralisation of Iran’s nuclear capability. The full text of the agreement was not released.
“The market impact is clear for now,” said Charu Chanana, chief investment strategist at Saxo. “Oil faces further downside as the war premium unwinds, equities get a risk-on impulse, and Fed hike bets that were added on [to] inflation fears could start to reverse.
“The [US] dollar may also stay under pressure if [safe] haven demand fades, while gold could find support again as real-yield and Fed concerns ease.”