Stocks gain as Trump extends Iran ceasefire

US stock futures rose and the dollar wavered on Wednesday after President Donald Trump said he would indefinitely extend the Iran ceasefire, keeping sentiment buoyed, although with the Strait of Hormuz still closed, oil held onto its recent gains.

Mr Trump’s announcement appeared to be unilateral, and it was not immediately clear whether Iran or US ally Israel would agree to extend the ceasefire, which began two weeks ago.

Markets, though, took the news in stride with risk momentum intact. S&P futures rose 0.5 per cent while Nasdaq futures gained 0.6 per cent in early Asian hours.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.14 per cent after hitting a seven-week high in the previous session. Japan’s Nikkei was down 0.2 per cent as traders consolidated their recent gains.

After a sharp selloff in March due to war in the Middle East, markets across the globe have swiftly rebounded in April and are back at pre-war levels as the prospect of a peace deal and the ceasefire have helped risk sentiment.

“It appears markets were right to assume peak war uncertainty is behind us,” said Matt Simpson, a senior market analyst at StoneX.

“Risk seems likely to remain buoyant and dips viewed favourably by equity bulls. The closure of the Strait of Hormuz is already priced in.”

Mr Trump said he would continue the US Navy’s blockade of Iran’s ports and shore. Tehran has effectively closed the Strait of Hormuz through which one-fifth of world’s energy supply usually flows, causing a global energy shock.

US West Texas Intermediate crude futures climbed 0.44 per cent to $US90.12 ($A125.61) a barrel. The benchmark contract rose 2.8 per cent on Tuesday.

In currencies, the euro last fetched $US1.1748 ($A1.6375) in early trading. The yen was a bit stronger at 159.26 per dollar and sterling firmed to $US1.3519 ($A1.8843).