Stock markets fell Friday as investors awaited news of an extension to the Iran-US ceasefire, while crude prices edged back down following the previous day’s rally.
The losses follow a healthy, record-breaking week for equities fuelled by hopes the Middle East war, which is heading into a seventh week, could be close to an end after Donald Trump said negotiators were close to a deal.
But worries abound that a shaky truce agreed earlier this month — and which ends next week — could fall apart and spark a fresh market rout.
The US president on Thursday struck an optimistic tone, telling reporters that “it’s looking very good that we’re going to make a deal with Iran, and it’s going to be a good deal”, adding that talks between Washington and Tehran could resume this weekend.
He also claimed Iran had “agreed to give us back the nuclear dust”, using his name for the country’s enriched uranium stockpile, and the deal would include “free oil” as well as the opening of the Strait of Hormuz.
“We had to make sure that Iran never gets a nuclear weapon,” Trump said at the White House. “They’ve totally agreed to that. They’ve agreed to almost everything, so maybe if they can get to the table, there’s a difference.”
Iran has given no public indication it would surrender its stockpile.
However, Defense Secretary Pete Hegseth took a tough line on the situation earlier in the day, telling a Pentagon news conference: “If Iran chooses poorly, then they will have a blockade and bombs dropping on infrastructure, power and energy.”
Meanwhile, some Gulf Arab and European leaders fear a long-term agreement could take six months to achieve and called for the truce to cover such a time period, Bloomberg reported.
They wanted the Strait of Hormuz — through which about a fifth of global oil and LNG passes — opened immediately and have warned in private of a global food crisis if that is not achieved by next month, the report said.
Stocks fell across the region, with Tokyo, which hit a record high Thursday, among the biggest losers, with Seoul, Hong Kong, Shanghai and Singapore also well down.
Taiwan’s TAIEX fell. On Thursday it hit a market capitalisation of US$4.14 trillion to top the UK’s market capitalisation and become the world’s seventh biggest, according to Bloomberg data.
That came even after the S&P 500 and Nasdaq enjoyed record closes on Wall Street.
Analysts said traders were heading into the weekend to positioning for any surprise developments.
