A key gauge of
has fully recovered its losses from the start of the United States-Iran war,
that the
after Iran reopened the Strait of Hormuz.
The
MSCI Emerging Markets Currency Index
rose 0.6 per cent to 1,884.37 points on Friday, after Iran announced that the Strait of Hormuz is now “completely open” for commercial traffic. The latest development
more than 10 per cent, with Brent crude trading at around US$86 per barrel amid revived optimism there may be an end in sight to the conflict.
“While there might still be some doubts over whether shipping is fully back to normal, market seems to think the worst is behind us,” said Dan Pan, an economist at Standard Chartered Bank in New York. “Lower oil price also supported rally among some energy importers.”
Iran’s announcement comes after Trump earlier had claimed concessions by Tehran will pave the way for a deal to end the war that continues to choke off supplies from the Persian Gulf. Trump later said the U.S. naval blockade will of the vital energy transit route will remain in place until “our transaction with Iran is 100 per cent complete.”
The conflict, which started at the end of February, has caused chaos across global financial markets, sending the price of Brent crude briefly near US$120 a barrel and tanking stocks. A gauge tracking emerging-market equities is also at the cusp of erasing losses since the onset of the war at the end of February.
“We remain constructive overall, as valuations and positioning have both reset, and earnings growth is likely to be strong per our baseline macro assumptions,” Goldman Sachs strategists led by Kamakshya Trivedi wrote in a note April 15.
The S&P 500 Index erased its war losses earlier this week, in part bolstered by strong corporate earnings.
—With assistance from Philip Sanders.