Shares of major Middle Eastern banks advanced strongly on Wednesday, reflecting a wider rebound across global equity markets after an announced de-escalation in hostilities involving the U.S., Israel and Iran.
Regional leaders in the banking sector posted double-digit and high single-digit moves: Emirates NBD Bank rallied nearly 10%, First Abu Dhabi Bank rose 8%, Qatar National Bank climbed 4.2% and Abu Dhabi Commercial Bank increased by more than 5%.
The sharp market response followed a late announcement from Donald Trump, who agreed to a two-week ceasefire with Iran just hours before a self-imposed deadline tied to the reopening of the Strait of Hormuz. Earlier in the day, Trump had warned that "a whole civilization will die tonight" if his demands were not met, a comment that preceded the unexpected turn in tone.
The ceasefire arrangement, which Pakistan Prime Minister Shehbaz Sharif helped mediate, reportedly includes plans for U.S. and Iranian delegations to meet in Islamabad later this week. According to the announcement, the accord is conditional on Iran halting its blockade of oil and gas flows through the strait - a maritime chokepoint that accounts for roughly one-fifth of global oil shipments.
Iran signalled a willingness to cooperate in the process. Foreign Minister Abbas Araqchi said Tehran would stop counter-attacks and ensure safe passage through the waterway.
On the social platform Truth Social, Trump wrote: "This will be a double sided CEASEFIRE!" He added that negotiations were moving toward "Longterm PEACE with Iran, and PEACE in the Middle East." He also described a 10-point proposal from Iran as a "workable basis" and said a final agreement could be reached within the two-week window.
Markets reacted quickly to the developments beyond the Gulf. Stock indices across Asia advanced: Japan's Nikkei rose 5.4%, while China's CSI300 and Hong Kong's Hang Seng gained 3.4% and 3.1%, respectively. U.S. and European equities were also expected to open higher in response to the de-escalation.
Energy markets moved in the opposite direction. Oil prices dropped sharply, with U.S. crude futures retreating to their lowest level since March 26.
The combination of a calming geopolitical backdrop and the prospect of restored maritime traffic through a crucial oil artery triggered a rapid reassessment of risk across banking, equity and energy markets.