Global equities reach new records on Middle East truce hopes

Global equity markets reached new heights on Thursday, marking a tenth consecutive day of record-setting performance as investors reacted to potential de-escalation in the Middle East. Professional observers in the United Kingdom and Singapore noted that the market has completed a significant recovery from the volatility seen following actions involving the United States, Israel, and Iran.

The MSCI INC world stocks index advanced 0.25%, hitting its first all-time high since the end of February. This 11% rebound has been supported by strong bank earnings and the S&P 500 crossing the 7,000-point mark on Wednesday.

\"It almost looks like the perfect V-shaped recovery,\" said Standard Chartered’s Chief Investment Officer for Africa, Middle East and Europe, Manpreet Gill, citing technology stocks and lower energy prices as key drivers.

Energy costs have retreated significantly, with Brent Crude Oil trading near $95 per barrel. Tensions eased further on news that Tehran might permit free navigation through the Oman side of the Strait of Hormuz as part of a diplomatic proposal.

\"I think what everyone’s going to be obviously quite cautious of is, whether there are any second-round effects that we see that come later,\" Gill noted regarding inflation risks.

In currency markets, the EUR/USD saw the euro lose ground as the dollar index ended an eight-day slide. Meanwhile, political focus in the U.S. shifted to a dispute between President Donald Trump and Fed Chair Jerome Powell over the latter's board seat.

The recovery was particularly pronounced in Asia. In Japan, the Nikkei 225 index hit a record high. The USD/JPY pair reflected a firmer yen at 158.71 following high-level meetings between Japanese and U.S. treasury officials, including Treasury Secretary Scott Bessent.

\"Markets are now basically looking past the conflict and pricing that there’s going to be some kind of settlement,\" said Khoon Goh, head of Asia research at ANZ.

Economic momentum in China also contributed to the positive sentiment, with first-quarter GDP growth reaching 5.0%. This data pushed the USD/CNH to near a three-year high of 6.8152 in offshore trading.

Further strength was observed in Taiwan and South Korea, driven by the semiconductor industry. Taiwan Semiconductor Manufacturing Co (TSMC) bolstered investor confidence by reporting a significant 58% jump in quarterly profits, underscoring the demand for AI technology.

In the commodities sector, Gold climbed 0.8% to $4,825.79. In Australia, the AUD/USD reached a four-year peak of $0.71890 after employment data met expectations, holding the jobless rate steady at 4.3%.

\"The latest data will reinforce the RBA’s assessment that upside risks to inflation are greater than downside risks to the labour market,\" analysts from Capital Economics stated regarding the Reserve Bank of Australia.