|Follow us on:|
Under the tenets of the interim deal, Iran will now have access to nearly $8 billion in frozen assets from oil sales made before punitive sanctions went into full effect in the past few years.
The most direct impact of the interim deal reached in Geneva over the weekend was felt in oil markets: Light crude oil for January delivery, which had closed at $95.20 late last week in New York trading, fell on Monday before settling down $0.75 at $94.09 a barrel.
It regained some momentum to $94.40 a barrel in early Tuesday trading due to a loss in Libyan oil productivity.
Oil prices would have likely fallen much more severely had the sanctions on sales not remained in place.
Currently, only four countries – India, Japan, China and South Korea – have been issued a waiver from the sanctions regimen to buy Iranian oil.
The interim nuclear deal also buoyed markets in neighbouring oil-importer Turkey where the stock market rose 1.6 per cent, and the Lire currency gained 0.5 per cent against the greenback on Monday.
India’s stock market – the Sensex – also felt the boost from the Iran interim deal, soaring more than 380 points, almost 2 per cent. Experts believe that India, which threw its support behind the interim agreement on Sunday, will reap benefits in its oil imports from Iran now that sanctions have been eased.
On Monday, officials in India’s Petroleum Ministry and oil companies in New Delhi said India is likely to resume paying Iran in Euros after Sunday’s historic accord made it easier to import crude oil from one of its biggest suppliers.
Meanwhile, stocks jumped 0.5 per cent in Seoul’s Kospi, and in Japan, the Nikkei rose 1.5 per cent to 15,619.13, a six-month high. The Nikkei began to slip in early morning trading on Tuesday.
In Israel, and despite Prime Minister Benjamin Netanyahu’s warning that the interim deal would endanger the country, stocks surged to record highs immediately after Iran and the US announced that they had reached an agreement.
Analysts said that a majority of Israeli investors believe that the risk of a military confrontation between their country and Iran has now been reduced.
On Monday, Israeli stocks in the TA 100 and TA 25 indices hold steady after registering 0.5 and 0.7 per cent growth, respectively, on Sunday, a normal working day there.
In New York, the Nasdaq composite gave investors a sense of what it felt like in 2000 when it briefly topped the 4,000 mark for the first time in 13 years.
But market experts are warning that the gains in emerging markets and Asia may be short-lived as speculation continues about the Federal Reserve’s possible tapering of the $85-billion stimulus package early next year.