ISLAMABAD: Financial markets across the world turned positive on Friday following reports that Iran and the US are set to restart talks in Islamabad, easing fears of supply disruption in the Middle East and pushing oil prices lower while supporting equities across major regions.
At the start of trading, oil prices had briefly surged on geopolitical concerns, with Brent crude touching $107.02 per barrel and West Texas Intermediate (WTI) rising to $97.40 per barrel amid tensions around the Strait of Hormuz. However, sentiment shifted sharply later in the session after confirmation that an Iranian delegation would visit Pakistan, alongside the expected arrival of a two-member US delegation for diplomatic engagement.
Following the positive developments, crude oil prices retreated as risk premiums eased. Brent fell to $104.80 per barrel, while WTI declined to $93.88 per barrel, reflecting reduced concerns over immediate supply disruption through the key global shipping route. Despite the decline, Brent remained above the $100 per barrel level, though volatility narrowed to intraday swings of around $3–$6 per barrel, indicating a more stable risk outlook compared to earlier in the session.
Market analysts said the easing of tensions between Washington and Tehran had reduced fears of escalation in the Strait of Hormuz, one of the world’s most critical oil transit chokepoints. However, they noted that prices remain sensitive to any renewed geopolitical developments, with markets still balancing potential sanctions relief against supply uncertainty.
The softer oil outlook provided relief to global equity markets, which moved into positive territory across major regions. Lower crude prices eased inflation expectations and improved risk appetite, particularly in energy-importing economies.
In the United States, major indices including the S&P 500 and Dow Jones Industrial Average traded higher, gaining around 0.3% to 0.7%, supported by easing energy costs and expectations of improved corporate margins. Energy stocks, however, lagged as crude prices declined.
In the United Kingdom, the FTSE 100 advanced by approximately 0.4% to 0.8%, benefiting from broader market optimism and reduced pressure from oil price inflation, although gains were partially offset by weakness in the energy sector.
Germany’s DAX index also moved higher, rising between 0.3% and 0.6%, as lower energy costs supported industrial and export-oriented stocks, while sentiment improved on expectations of reduced geopolitical risk.
Asian markets followed the positive global trend. China’s indices gained between 0.3% and 0.7%, Japan’s Nikkei rose around 0.4% to 0.9%, South Korea’s KOSPI advanced 0.3% to 0.8%, and India’s benchmark indices moved up 0.2% to 0.6%.
Pakistan’s stock market also strengthened, rising between 0.5% and 1.2%, as easing oil prices improved inflation outlook and boosted investor sentiment.
