Glimmer of Hope

Hope for an end to the Middle East conflict has resurfaced after the US presented a 15-point plan to Iran. Markets around the world were buoyed by the development, with all major benchmarks firmly in positive territory.

US–Iran peace talks instil confidence in US investors

The tech-laden NASDAQ led American gains, adding +1.0%. The DOW and S&P 500 rose +0.8% and +0.8% respectively. Investors looked to reports that the US has approached Iran with a plan to halt fighting. Oil prices retreated below the US$100/bbl mark. Iran reportedly received a 15-point plan to end the conflict, though conflicting reports remain from Iran’s state media regarding how this plan has been received. Chip stocks led the way on Wednesday, as AMD rose +7.3% on reports that the chipmaker will be raising CPU prices in March. Intel (+7.7%) saw a similar reaction after suggesting the same will happen in April. Meanwhile, Meta gained +1.1% ahead of its first wave of mass layoffs. Cyclically exposed financials and industrials also fared strongly. The US two-year yield fell -6bp to 3.88%, while the 10-year yield dropped -7bp to 4.33%.

Europe continues winning streak, London unfazed by rate hike concerns

The pan-European Stoxx 600 gained +1.4% in its third straight day of gains, while London’s FTSE 100 also added +1.4%. British CPI remained at 3.0% in February, unchanged from January’s figure. Markets are expecting two or three quarter-point increases to the UK cash rate this year, while the Bank of England forecasts a 3.5% cash rate by the middle of the year (currently 3.75%). ASOS rose +13.0% after the online retailer announced a +50% increase in 1H profit.

Confidence in diplomatic talks pull Australasian indices into positive territory

The main Asian benchmarks rallied, with Japan’s Nikkei 225 leading the charge at +2.9%. China’s CSI 300 and Shanghai Composite rose +1.4% and +1.3% respectively. Korea’s Kospi jumped +1.6%, while Hong Kong’s Hang Seng ticked +1.1% higher. The ASX 200 took confidence from a diplomatic push to end the Iran war, rising +1.9%. Australian CPI eased to 3.7% from 3.8% on an annual basis. Monthly, CPI was flat after an +0.4% rise in January. Notably, February data did not capture the recent increase in petrol prices. The resources sector benefited from diplomatic talks, with BHP and Rio Tinto gaining +3.3% and +1.6% respectively. Rio Tinto also announced that it has struck an agreement with lawmakers to keep its North Queensland aluminium smelter operating. Across the ditch, the NZX 50 increased +1.8%, led by EBOS (+4.4%), Oceania Healthcare (+4.2%), and Infratil (+3.5%); while KMD Brands had dipped -2.5% before entering a trading halt ahead of a capital raise.

WTI Crude below US$100, precious metals and Iron Ore up

WTI crude fell -2.1% to US$90.39/bbl while Brent crude dropped -2.4% to US$102.03/bbl at the time of writing, as investors were optimistic about a resolution to reopen the Strait of Hormuz. Gold gained +1.8% to US$4,556.24/oz, Silver shifted +1.8% higher to US$72.51/oz, while Iron ore added +0.1% to US$106.10/MT.