Asian stocks rally as US-Iran ceasefire proposal eases oil prices

Global markets rallied on Tuesday as diplomatic efforts to de-escalate the US-Iran conflict buoyed investor sentiment, easing oil prices from recent highs and lifting equities across Asia.

The catalyst was a report from Reuters on Monday that mediators had presented Iran with a proposal for a 10-day ceasefire aimed at reviving an interim deal reached last month. A senior Iranian official confirmed Tehran had received the proposal, which seeks to salvage the memorandum of understanding that President Donald Trump and Iranian President Masoud Pezeshkian formally signed on June 17 before hostilities resumed in early July.economictimes+1

Markets React to Diplomatic Momentum

Oil prices eased on Tuesday, with Brent crude trading around $88 a barrel after rising the previous session on fresh fighting over the weekend. Gold rose more than 1% as investors weighed the prospect of eased oil-driven inflation pressures, with spot gold climbing to above $4,050 per ounce, according to Reuters.markets.ft+4

Asian equities advanced broadly. Japan's Nikkei 225 gained more than 2% as markets reopened from a holiday, while South Korea's KOSPI rebounded nearly 4% after slipping in the prior session. China's CSI 300 climbed 1.7%, and Singapore's Straits Times Index rose 0.7%. Technology shares led gains, with Samsung Electronics surging over 6%.investing

Uncertainty Clouds Path Forward

Qatar has played a central role in mediation between the two sides since June, hosting separate meetings with US and Iranian negotiators. The 10-day ceasefire proposal aims to create space to revive the June MOU rather than negotiate an entirely new framework.npr+2

However, prospects remain uncertain. The earlier ceasefire, brokered by Pakistan in April and extended through a 60-day MOU in late May, collapsed in early July when hostilities resumed. Politico reported that oil markets had gone "back on edge" after the US and Iran "shred" that agreement, and President Trump warned that Iran would "pay many times over" following recent American casualties.axios+3

The Houthi movement in Yemen added further complication on Tuesday by threatening a naval blockade on Saudi Arabia, raising the prospect of additional disruptions to regional energy shipments. Analysts noted that while ceasefire hopes provide relief, elevated geopolitical risk continues to put a floor under oil prices.investing