World Stocks Surge to Record Highs Amid Optimism for Middle East Truce
LONDON/SINGAPORE – Global equity markets experienced a significant rally on Thursday, marking the tenth consecutive day of gains and reaching new record highs. This surge follows a remarkable six-week recovery from the selloffs triggered by the recent military actions involving the United States and Israel against Iran. The MSCI’s main world stocks index rose by 0.25%, buoyed by increasing optimism regarding a potential resolution to the ongoing conflict, alongside a decline in oil prices, which have settled around $95 per barrel, down from nearly $120 in March.
This marks the first all-time high for the index since hostilities escalated at the end of February. The U.S. S&P 500 index also crossed the 7,000-point threshold on Wednesday, contributing to an 11% rebound for the MSCI World index.
Market Recovery and Economic Indicators
Manpreet Gill, Chief Investment Officer for Africa, the Middle East, and Europe at Standard Chartered, described the market’s recovery as resembling a “perfect V-shaped recovery.” He noted that the rebound has been significantly driven by U.S. technology stocks and the easing of oil prices.
European markets also saw positive movement, with stocks rising by 0.2%, although they have not yet returned to pre-war levels. Government borrowing costs in the region decreased as traders adjusted their expectations regarding interest rate hikes, although bond yields remain elevated compared to pre-conflict levels.
Gill indicated that if the recent spike in energy prices subsides and inflationary impacts are temporary, central banks may adopt a more lenient approach to monetary policy. He cautioned, however, that there could be secondary effects that may emerge later.
Developments in Oil Markets
In the oil sector, Brent crude remained just above $95 per barrel. Reports from Tehran suggested that Iran might allow ships to navigate freely through the Omani side of the Strait of Hormuz without the threat of attacks, as part of ongoing negotiations with the United States.
The U.S. dollar index, which gauges the dollar’s strength against a basket of six currencies, showed a slight increase of around 0.1%, following eight consecutive days of decline. Amid these developments, U.S. President Donald Trump has reignited tensions with Federal Reserve Chair Jerome Powell, threatening to dismiss him from his position on the Board of Governors if he does not vacate it when his term as Fed chair concludes on May 15.
The dollar’s strengthening has affected the euro, which had approached its highest level since the onset of the conflict at $1.182325.
Currency Movements and Regional Impacts
The Japanese yen appreciated to 158.71 after the country’s finance minister announced an agreement with U.S. officials to enhance communication regarding exchange rates. Khoon Goh, head of Asia research at ANZ, noted that markets are increasingly looking beyond the conflict, anticipating a settlement.
As the market begins to factor out the “war premium,” Goh suggested that the dollar may face further downward pressure, continuing a trend that has been in place since last year. In offshore markets, China’s yuan traded near a three-year high of 6.8152 per dollar, while Chinese stocks rose over 1% following data indicating a 5.0% growth in the economy during the first quarter, driven by strong exports despite sluggish domestic consumption.
Performance of Asian Markets and Commodities
The MSCI Asia-Pacific index climbed by 1.2%, with Japan’s Nikkei 225 index surging by 2.4% to set a new record. Markets in Taiwan and South Korea also performed well, particularly following a 58% increase in quarterly profits reported by Taiwan Semiconductor Manufacturing Co (TSMC), a key player in the AI sector.
Analysts from Goldman Sachs expressed a positive outlook on emerging market stocks, citing strong underlying profit growth as a likely trend.
In the commodities market, gold prices increased by 0.8% to $4,825.79. In the cryptocurrency sector, Bitcoin rose by 0.3% to $75,084.56, while Ether experienced a slight decline of 0.2% to $2,359.89. The Australian dollar also gained 0.3%, reaching a four-year high of $0.71890, supported by employment data that met expectations for March, indicating an increase in full-time hiring while maintaining a steady jobless rate of 4.3%.
Analysts from Capital Economics noted that the latest employment data reinforces the Reserve Bank of Australia’s assessment that inflationary risks are more pronounced than risks to the labor market.
Source: www.zawya.com
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Published on 2026-04-16 16:48:00 • By the Editorial Desk
