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Published : 17 Apr 2026, 09:51 AM
Asian stocks were poised for a second week of strong gains and oil prices were pinned below $100 a barrel with investors hopeful for a near-term resolution to the Middle East war.
Investors have been quick to take an optimistic view on any signs of denouement this month, even though the Strait of Hormuz - through which a fifth of the world's oil and gas supply typically flows - remains closed.
A 10-day ceasefire between Lebanon and Israel went into effect on Thursday and President Donald Trump said the next meeting between the US and Iran may take place over the weekend, when their current ceasefire is due to expire.
That pushed oil prices lower, with Brent crude futures LCOc1 falling more than 1 percentto $98.14 a barrel. US West Texas Intermediate crude futures CLc1 fell 1.6 percent to $93.15 a barrel.
In stocks, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.6 percent, but remained close to its highest since Mar 2, the first trading day after the Iran war broke out.
The index is up 14.5 percentin April after dropping 13.5 percentin March. Japan's Nikkei .N225 fell 0.9 percentin early trading after hitting a record high on Thursday. Almost all stock markets are back to levels before the war erupted at the end of February.
For Andrew Chorlton, CIO for public fixed income at M&G, the last two weeks have been surprising in how quickly markets have been willing to look through the conflict and energy shock.
"There's quite a strong contrast between what policymakers and central bankers are saying about the risks that this (conflict) is creating versus what the market is implying," he said.
"That seems somewhat complacent," Chorlton added. "It seems unlikely that there shouldn't be some additional risk premium priced in, either to growth or to inflation."
The US dollar benefited from safe haven flows in March, but has since given up those gains. The euro EUR= last bought $1.1779, just below the seven-week high it touched in the previous session.
The US benchmark S&P 500 and the tech-heavy Nasdaq rose modestly to record closing highs for a second straight day on Thursday.
"I think equity markets are remaining positive and some solid US earnings have helped, but - and it's a big but - we need to see some concrete evidence that peace is going to last," said Nick Twidale, chief market strategist at ATFX Global.
"And to me, that is a full reopening of the Strait, or we could see some substantial corrections in global stocks in the coming days and weeks."
Closure of the waterway has caused the worst oil price shock in history, and spurred the International Monetary Fund to downgrade its outlook for the global economy, warning that a prolonged conflict could push the world to the brink of recession.
The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, was at 98.24, loitering near its lowest since Mar 2. The index had declined for eight straight sessions through Wednesday.
The yen JPY= was steady at 159.32 per dollar while the risk-sensitive Australian dollar AUD= fetched $0.7163, drifting near the four-year high it touched on Thursday.
