Oil prices slumped to two-month lows on the news of an agreement before trimming some of the losses. US West Texas Intermediate (WTI) crude futures were last down 1.2 per cent to US$86.69 a barrel, on top of a 2.6 per cent drop overnight. Brent dropped 1.1 per cent at US$89.40 per barrel, having fallen nearly 3 per cent overnight.
MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 3.2 per cent, led by a 7.4 per cent surge in South Korea’s KOSPI. Japan’s Nikkei rose 2.7 per cent.
China’s blue-chip CSI300 rose 1 per cent, while Hong Kong’s Hang Seng gained 1.3 per cent.
Overnight, Wall Street rallied with the three major indexes registering their biggest daily gains since Apr 8, when the US and Iran agreed to a temporary ceasefire. The Nasdaq jumped 2.5 per cent, helped by expectations of a strong market debut of Musk’s SpaceX.
IG estimates the expected market cap of SpaceX at the close of business on day one would be just over US$2.4 trillion.
“It suggests that SpaceX’s market cap … will be about 35 per cent higher than the US$1.78 trillion valuation set for the IPO,” Tony Sycamore, analyst at IG, said in a note. “This, in turn, suggests the SpaceX share price will likely finish today somewhere in the US$175/US$180 range.”
Treasuries gained as hopes of a peace deal in the Gulf led markets to trim bets of a rate hike from the Federal Reserve this year. Pricing for a hike in October has come back to 36 per cent from 51 per cent.
Two-year Treasury yields were steady at 4.074 per cent on Friday, having slumped 6 basis points overnight. The benchmark 10-year Treasury yields held at 4.4710 per cent, after falling almost 8 basis points overnight.
The dollar stabilised after overnight losses. It rose 0.2 per cent to 160.20 yen, after retreating 0.4 per cent in the prior session. Traders are still on high alert for intervention from Japanese authorities as the yen stays close to the 160 level that many see as a line in the sand.
The Australian and New Zealand dollars were down about 0.3 per cent each against the greenback, following overnight jumps.
Precious metals resumed declines on Friday. Spot gold slipped 0.6 per cent to US$4,189 an ounce, following a 3.5 per cent jump overnight, while spot silver also fell 0.6 per cent to US$66.93 an ounce, after a 5.8 per cent gain.