Global stocks rally on lower oil prices, US-China hopes

Hong Kong’s main index rose 1.2 per cent Monday while shares in Shanghai rose one per cent, and South Korea’s tech-heavy benchmark finished the day up 1.7 per cent. Tokyo was closed for a public holiday. — AFP pic

First Published: Monday, 21 Sep 2026 7:42 PM MYT

LONDON, Sept 21 — Stock markets climbed on Monday, boosted by falling oil prices and positive signals from trade talks between Chinese and US officials over the weekend.

Stocks had come under pressure last week after the US Federal Reserve raised interest rates to curb inflation pressures, in part from soaring energy costs from the US war against Iran.

But with oil falling further Monday, “The pressure cooker of worry about inflation is giving off less steam as crude prices have fallen back amid growing hopes that fresh negotiations could lead to a breakthrough in the Iran conflict,” said Susannah Streeter, chief investment strategist at Wealth Club.

Oil prices dropped more than three per cent on Monday after US President Donald Trump signalled that he would be open to meeting with Iranian President Masoud Pezeshkian, who will travel to New York for the UN General Assembly this week.

That helped the London, Paris and Frankfurt stock markets pile on around one per cent in midday deals.

Investors brushed off fresh political difficulties for German Chancellor Friedrich Merz, whose centre-right CDU party suffered two regional election defeats at the hands of far-right and far-left parties.

US and Chinese economic officials met on Sunday for closely watched talks on trade and artificial intelligence, ahead of a summit on Thursday between Trump and Chinese President Xi Jinping in Washington.

US Treasury Secretary Scott Bessent said that following lengthy conversations, the two countries had discussed setting up a channel called “US-China AI dialogue” to communicate about the technology and its potential risks.

Hong Kong’s main index rose 1.2 per cent Monday while shares in Shanghai rose one per cent, and South Korea’s tech-heavy benchmark finished the day up 1.7 per cent. Tokyo was closed for a public holiday.

At the talks between Trump and Xi, “the area with the most potential to move markets is probably any Chinese cooperation on Iran, given recent oil and bond market volatility,” said Thomas Mathews of Capital Economics.

Streeter said “there are hopes that the trade truce, which is due to expire on November 10, will be extended, and that potentially lower tariffs could be brokered”. — AFP