World shares rise as oil drops 7% on US-Iran ceasefire talks

Bangkok,UPDATED: Jul 27, 2026 15:44 IST

World shares were mostly higher on Monday and oil prices fell nearly 7 per cent after the US and Iran held back from further fighting and discussed a possible return to negotiations on an interim ceasefire deal. The move eased market worries after nearly two weeks of escalating tensions linked to Iran's firing at ships trying to pass through the Strait of Hormuz.

Markets reacted with relief across regions. US futures rose early on Monday, while Brent crude, the international benchmark, fell 6.8 per cent to USD 85.49 a barrel. US benchmark crude dropped 7 per cent to USD 83.06 per barrel.

The Pentagon did not respond to questions about the pause in attacks on Iranian coastal areas and infrastructure. Commenting on the market reaction, Stephen Innes of SPI Asset Management said, "Oil's sharp retreat at the Monday open did more than knock a few dollars off the barrel. It loosened the geopolitical knot that had been tightening around equities, currencies, bonds and central banks for most of July."

In early European trade, Germany's DAX rose 1.6 per cent to 25,497.42 and the CAC 40 in Paris was up 0.8 per cent at 8,436.94. Britain's FTSE 100 added 0.5 per cent to 10,784.00. Futures for both the S&P 500 and the Dow Jones Industrial Average were up 1 per cent.

In Asia, Japan's Nikkei 225 gained 0.5 per cent to 64,931.19, while South Korea's Kospi advanced 1 per cent to 6,755.75. Hong Kong's Hang Seng climbed 1 per cent to 25,207.18 and the Shanghai Composite index rose 1.2 per cent to 3,858.25. Australia's S&P/ASX 200 jumped 1.4 per cent to 8,894.00. Taiwan's Taiex slipped 0.1 per cent, while India's Sensex added 1.1 per cent.

Shares in Chinese memory chipmaker CXMT surged 466 per cent as trading began on Shanghai's technology board. The rally made it China's most valuable listed company, with an estimated market capitalisation of 3.3 trillion yuan, or nearly USD 490 billion.

On Friday, the S&P 500 was little changed, rising by less than 0.1 per cent and posting its second straight weekly loss for the first time since March. The Dow Jones Industrial Average gained 0.5 per cent, while the Nasdaq composite fell 0.6 per cent, dragged lower by sharp losses in heavyweights such as Micron Technology, down 7 per cent, and Broadcom, down 2.7 per cent.

Recent rises in energy prices and fresh tariffs announced last week by the administration of US President Donald Trump have raised concerns about inflation, which has been weighing on consumers and shaping expectations around the Federal Reserve's interest-rate policy. The Fed meets this week, but rising inflation has reduced hopes of a rate cut any time soon. Wall Street has been leaning towards a possible rate hike to contain higher prices.

Higher energy costs are taking up a bigger share of household budgets, which have shifted more towards essentials such as petrol. According to AAA, the national average price for petrol in the US stands at USD 4.11 a gallon. That is still lower than in the spring, when the conflict in Iran widened, but almost a dollar higher than a year ago. Innes said, "Oil is the fastest-moving tax in the global economy. When crude rises sharply, consumers feel it at the fuel pump, airlines and transport companies feel it in their operating costs, manufacturers feel it in their logistics, and central banks begin worrying that the initial supply shock will spill over into broader inflation expectations."

Corporate earnings are also drawing attention to whether profits from the boom in spending on artificial intelligence can be sustained. Technology giants such as Alphabet and Nvidia have been spending heavily to expand AI capacity, and investors are increasingly questioning whether those investments will produce enough profit to justify the high stock valuations that have driven markets higher this year. In currency trade early Monday, the US dollar slipped to 163.56 Japanese yen from 163.64 yen, while the euro edged up to USD 1.1399 from USD 1.1398. Overall, global markets rose as easing tensions between the US and Iran pushed oil lower, even as investors kept watch on inflation, interest rates and corporate earnings.

With PTI Inputs

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