Closing summary
Markets have been cheered by news of the two-week ceasefire between the US, Israel and Iran. However, this excludes Lebanon, where Israel has carried out its biggest wave of air strikes today since the war there began on 2 March.
Iran has agreed to reopen the strait of Hormuz, where around 1,000 ships have been trapped. A senior Iranian official told Reuters Tehran could open the key shipping route on Thursday or Friday ahead of peace talks in Islamabad.
Brent crude, the international oil benchmark, has tumbled 15.5% to $92.28 a barrel, down nearly $17. As is stands, it is on track for its biggest daily drop since April 2020, the start of the Covid pandemic, when the price fell 24%.
UK gas prices have tumbled 18%, taking the May delivery contract 24.3p lower to 110.67p per therm.
Stock markets have rallied around the world, starting in Asia where Japan’s Nikkei leapt 5.4% and South Korea’s Kospi soared 7.5%. Over here, the FTSE 100 in London is 275 points, or 2.66% ahead at 10,623. Germany’s Dax jumped 5.2%. On Wall Street, stocks surged to one-month highs. The Dow Jones has gained 2.5% while the S&P 500 has risen 2.2% and the Nasdaq climbed 2.8%.
The dollar is on the backfoot, sliding 1.1% against a basket of currencies. Sterling gained 1.2% to $1.3451.
Government bond yields have plummeted around the world, as traders scaled back bets on interest rate hikes. In the UK, borrowing costs fell the most in three years, measured by the yield (or interest rate) on two-year gilts, as government bonds are known.
Bond yields are sensitive to inflation prospects and have closely tracked oil prices.
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Thank you for reading. We’ll be back tomorrow. Take care (and enjoy the sunshine!) – JK
Updated
Ceasefire changes little for shipping in strait of Hormuz, experts say
There will be no “mass exodus” of ships through the strait of Hormuz, shipping analysts say, despite a two-week conditional ceasefire being agreed between the US and Iran with provision for the temporary reopening of the crucial maritime channel.
The ceasefire agreement “doesn’t change the situation in the sense that Iran is still in control”, said Richard Meade, the editor-in-chief at the maritime data provider Lloyd’s List Intelligence. “It still requires ships to essentially seek permission, and that’s the key. That means that nothing has changed – no permission, no transit.”
An estimated 2,000 ships and 20,000 seafarers have been trapped in the Gulf since the outbreak of war at the end of February, according to the UN, unable to pass through the strait to continue their journeys.
