Shares in Hong Kong as well as those on the mainland and in Asia rallied on Wednesday morning after US President Donald Trump agreed to a two-week ceasefire with Iran.

The news sparked a relief among investors who raised hopes that oil and gas flows through the Strait of Hormuz could resume.

It also sent oil prices falling, following weeks of market volatility and geopolitical upheaval after US and Israeli strikes on Iran in late February pushed tensions to the brink.

The Hang Seng Index rose 656 points, or 2.6 percent, to open at 25,772 points.

The tech gauge advanced almost three percent to open at 4,817 points.

Meanwhile, the mainland's benchmark, the Shanghai Composite Index, opened at 3,930 points, up by 40 points, or around one percent, and the Shenzhen Component Index was up by 2.4 percent to open at 13,717 points.

The ChiNext Index, which tracks China's Nasdaq-style board of growth enterprises, was up by three percent to open at 3,257 points.

The ChiNext Index, together with the Shenzhen Component Index and other indices, reflects the performance of stocks listed on the Shenzhen Stock Exchange.

Trump had agreed to a ceasefire with Iran less than two hours before his deadline for Tehran to reopen the strait or face devastating attacks on its civilian infrastructure.

Market reaction was swift and dramatic, with US crude futures down by around 16 percent to US$94.59 a barrel, while Brent futures also slid 15 percent to US$92.35 per barrel.

But beyond the immediate relief, investors remain cautious to see whether the ceasefire could lead to a broader resolution before placing major bets.

Shares in Asia also surged, with Japan's Nikkei 1.8 percent higher at the open, while South Korea's Kospi jumped 5.6 percent, triggering a halt in trading.

The S&P/ASX 200 index opened at 8,947 points, up by almost 220 points, or 2.5 percent.(Xinhua/Reuters)



Edited by Tony Sabine