PETALING JAYA: Investors are breathing a sigh of relief after the United States and Iran agreed to a ceasefire that includes an “immediate and permanent” end to military operations, sending oil prices lower and Asian equities higher.

However, experts caution that whether Malaysia can fully capitalise on improving sentiment will depend not only on the durability of the peace agreement, but also on domestic political stability and its ability to attract foreign funds.

Brent crude fell 5.1%, or US$4.49 (RM18.19), to about US$82.84 a barrel by 5pm yesterday, after touching an intraday low of US$82.61, amid expectations that the reopening of key oil shipping routes could ease global energy shortages.

The relief spilled over into Asian equities, with Japan’s Nikkei surging 5%, South Korea’s Kospi gaining 5.2% and Indonesia’s Jakarta Composite Index rising 4.1%.

Closer to home, however, Malaysia’s benchmark index lagged behind its regional peers.

The FBM KLCI rose just 0.5%, or 7.76 points, to close at 1,691.39, despite reaching an intraday high of 1,697.48, while Singapore’s Straits Times Index advanced 1.02%.

Economist Yeah Kim Leng said the “peace deal” provided much-needed relief to the global economy, as concerns over supply disruptions and rising inflationary pressures had intensified in recent weeks.