Australia’s benchmark stock index notched its strongest single-day gain in weeks on the final trading session of the week, driven by a wave of investor optimism following news of a 60-day ceasefire extension between the United States and Iran that raises hopes for a long-term de-escalation of Middle East tensions. The ASX 200 closed up 138.80 points, or 1.62%, at 8731.70, while the broader All Ordinaries index followed closely, climbing 145.40 points, or 1.65%, to settle at 8965. The Australian dollar edged slightly lower, dipping 0.02% to 71.60 U.S. cents by market close. The majority of market sectors tracked gains, with nine out of 11 industry groups ending the session in positive territory. Top mining stocks led the rally, as a projected easing of Middle East energy tensions reduced fears of disrupted commodity supply chains. BHP’s share price jumped 2.91% to $62.31, Rio Tinto gained 1.18% to $185.63, and Fortescue Metals Group closed 2.43% higher at $22.31. Technology and consumer discretionary stocks also outperformed broader market averages. Accounting software provider Xero added 0.91% to its value, Technology One rose 2.02% to $29.84, and Codan surged 3.95% to $42.65. In the retail sector, conglomerate Wesfarmers gained 1.67% to $79.79, Afterpay’s parent company Light Wonder rallied 4.23% to $116.73, and electronics retailer JB Hi-Fi closed up 1.17% at $74.49. The sharp afternoon rally kicked off immediately after official confirmation that Washington and Tehran had agreed to extend their temporary ceasefire for two months to create space for formal negotiations on a permanent peace agreement. Global energy markets reacted immediately to the news, with Brent crude futures dropping 0.9% to settle at $92.87 U.S. dollars per barrel, easing fears of sustained high energy costs that have weighed on global economic outlooks in recent months. Samara Hammoud, international economist and currency strategist at Commonwealth Bank, noted in a client note that she holds 70% confidence that a final deal to reopen the strategic Strait of Hormuz will be finalized in the coming days. Hammoud added that U.S. Vice President JD Vance has confirmed the two sides are currently resolving remaining differences over wording in the agreement, with key sticking points including regulations on Iran’s nuclear capabilities. AMP chief economist and head of investment strategy Shane Oliver pointed out that global and Australian markets remain highly sensitive to any developments out of the Middle East, after a week of volatile trading driven by conflicting signals. “The week started on an optimistic note with former President Trump saying last weekend that the ‘final aspects and details of the deal are currently being discussed and will be announced shortly,’” Oliver explained. “But this was followed by new military strikes on Iran and Trump saying he was ‘not satisfied’ with the progress, which pushed oil prices back up. Now, indications point to a tentative agreement that only needs Trump’s final sign-off.” While Oliver acknowledged that ongoing risks of the conflict reigniting remain, he noted that striking a deal is heavily aligned with U.S. political interests ahead of upcoming midterm elections. “But the pressure on Trump to back away from continued escalation and agree to a deal is very high, as his approval rating continues to slide as the election approaches,” he said. In individual company news, Judo Bank was one of the ASX’s top performers, with its share price surging 12.23% to $1.56 after the regional lender announced it had completed a $750 million capital-relief securitization backed by small and medium enterprise loans. The move is expected to significantly strengthen the bank’s balance sheet and support future lending growth. Medical technology firm 4D Medical also notched major gains, rising 18.9% to $3.97 after it secured a commercial partnership deal with SimonMed Imaging, a leading U.S. healthcare provider that operates 170 outpatient imaging centers across the country.