Asia Markets Rally as Oil Prices Plunge on Gulf Fighting Pause

Asia's share markets rallied on Monday as a pause in fighting in the Gulf led to a sharp drop in oil prices, easing inflation risks and boosting bonds.

The lull in fighting over the Strait of Hormuz saw Brent crude slide 5.2% to $91.73 a barrel, while U.S. crude dropped 5.4% to $84.45.

Sally Auld, group chief economist at NAB, said 'Net, it looks as if developments in the Middle East have moved in a positive direction over the weekend, adding some credibility to the notion that oil above $100 a barrel seems to induce de-escalatory behaviour from both sides.'

The pullback in oil provided some relief from inflation fears and led markets to slightly pare the probability of rate hikes from the Federal Reserve.