Shares Rally, Oil Slumps as Iran- ‘Israel’ Ceasefire Goes into Effect

By Staff, Agencies

Global shares rallied and the dollar extended declines on Tuesday as a ceasefire to end a 12-day war between Iran and "Israel" came into effect, while oil prices dived to nearly two-week lows on easing concerns about supply disruptions.

Most of the moves came after US President Donald Trump announced late on Monday that Iran and "Israel" had agreed to a ceasefire. A few hours later, Trump said the ceasefire was now in effect and urged both countries not to violate it.

Oil prices fell over 3%, having already slid 9% on Monday when Iran made a token retaliation against a US base and signaled it was done for now.

With the immediate threat to the vital Strait of Hormuz shipping lane seemingly over, US crude futures fell another 3.7% to $65.96 per barrel, the lowest since June 11 before "Israel's" attacks on Iran began.

"With markets now viewing the escalation risk as over, market attention is likely to shift towards the looming tariff deadline in two weeks time," said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities.

"Our sense is that the quicker than expected resolution to the Middle East conflict leads to expectations for a swifter resolution on tariffs and trade deals."

Two sources told Reuters that Japan's tariff negotiator Ryosei Akazawa is arranging his seventh visit to the United States for as early as June 26, aiming to end tariffs that are hurting Japan's economy.

China's blue chips [.CSI300], opens new tab rose 1.2%, while Hong Kong's Hang Seng index [.HSI], opens new tab gained 1.8%.

News of the ceasefire saw the dollar extend an overnight retreat and slip 0.5% to 145.43 yen, having come off a six-week high of 148 yen overnight. The euro rose 0.2% to $1.1603 on Tuesday, having gained 0.5% overnight.