Asian stocks were set for their best weekly performance since 2022, as markets rallied strongly following a surge on Wall Street overnight after easing tensions between the United States and Iran triggered a sharp drop in oil prices.
The rally came after the US–Iran ceasefire reduced concerns over renewed inflationary pressures and the possibility of further interest rate hikes by central banks, boosting investor sentiment across global markets.
At the time of reporting, Japan’s Nikkei 225 was trading 1.85 per cent higher near 56,900, Hong Kong’s Hang Seng Index was up over 0.64 per cent to near 25,900, China’s SSE Composite Index gained 0.77 per cent to near 4,000, while South Korea’s Kospi rose 1.55 per cent to near 5,870.
Asian equities rose following a rally on Wall Street overnight as the United States–Iran ceasefire triggered a sharp drop in oil prices, easing concerns over renewed inflation and further rate hikes by central banks.
However, the upward momentum faced potential headwinds as traders remained cautious amid renewed risk aversion driven by ongoing uncertainty surrounding the longevity of the US–Iran ceasefire. Expected diplomatic talks between the United States and Iran in Islamabad over the weekend remained uncertain, with no official confirmation of delegates’ arrival on Friday.
Geopolitical tensions in the Middle East continued to cast a shadow over markets. Israel maintained its strikes on Hezbollah, despite Prime Minister Benjamin Netanyahu stating that Israel would soon begin direct negotiations with Lebanon. At the same time, US President Donald Trump said US forces would remain deployed around Iran until full compliance with the ceasefire agreement was achieved.
In Japan, stocks faced additional pressure from rising expectations that the Bank of Japan could increase interest rates in April in a bid to stay ahead of inflation. Japan’s 10-year government bond yield climbed near 2.4 per cent on Friday, close to its highest level since 1998. The rise in yields had accelerated since the onset of the Middle East conflict, as higher energy prices fuelled inflation concerns and strengthened expectations of tighter monetary policy by the central bank.
Economic data from China also influenced market sentiment. China’s Consumer Price Index rose 0.9 per cent year-on-year in March, down from 1.3 per cent in February and below the 1.2 per cent consensus forecast. On a monthly basis, the CPI fell 0.7 per cent after a 1.0 per cent increase in the previous period.
Meanwhile, China’s Producer Price Index rose 0.5 per cent year-on-year, rebounding from a 0.9 per cent decline and marking its first increase since September 2022. The increase was partly supported by higher energy costs amid disruptions in the Strait of Hormuz.
Erizia Rubyjeana
