Global stock markets advanced across the board on Friday, buoyed by optimism that a peace agreement between the United States and Iran may be imminent, with the technology and travel sectors leading the charge.
Reports indicate that the two nations have reached a consensus on a 14-point draft memorandum of understanding. Key provisions reportedly include Iran's commitment to reopen the Strait of Hormuz within 30 days, with the US pledging to lift oil sanctions, withdraw troops from the vicinity of Iran, and unfreeze approximately $24 billion in frozen assets. The US President has reportedly canceled a planned new round of strikes against Iran, suggesting a deal could be signed in Europe this weekend.
This development swiftly boosted risk appetite in global markets. Futures for the three major US stock indices all moved higher, with S&P 500 futures gaining about 0.7% and Nasdaq 100 futures rising approximately 1%. European markets continued to climb after opening, with the pan-European Stoxx 600 index up 1.7%, while France's CAC 40 and Germany's DAX indices both gained over 2%. Asian markets also showed strength, with Japan's Nikkei 225 closing 2.8% higher, South Korea's Kospi index surging 4.6%, and Hong Kong's Hang Seng Index rising 1.4%.
In terms of sector performance, technology stocks were a primary driver of the rally. Chip stocks, which had been pressured by escalating Middle East tensions, rebounded sharply, with the Philadelphia Semiconductor Index surging nearly 8% on Thursday. Concurrently, a pullback in oil prices significantly boosted the aviation and travel sectors. International oil prices fell sharply during Friday's session, with WTI crude dropping over 5% at one point to around $84 per barrel and Brent crude falling below $86. Shares of companies like Lufthansa, TUI Group, and airport operator Fraport saw gains ranging between 5% and 7%.
However, analysts caution that the agreement is not yet finalized. A spokesperson for Iran's foreign ministry stated that related matters are still under discussion, dismissing external reports as speculative. Some institutions have warned that even if a deal is reached, it could be fragile and might easily break down if nuclear negotiations do not progress. Markets remain alert to the possibility of setbacks in the talks.
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