Asian Markets Rise on Optimism for US-Iran Deal
Asian stock markets followed Wall Street's rally, driven by optimism over US-Iran talks that eased concerns about Middle East tensions. Crude oil and US bond yields moved lower, while Nvidia Corp. weakened following a more modest sales forecast.
South Korean stocks surged more than 4%, leading the MSCI Asia Pacific Index to rise 1.2%. Samsung Electronics rose as much as 7% after reaching a deal with labor unions to avoid a strike. However, investors remained cautious, as evidenced by a 0.5% decline in US index futures and a stable Bloomberg Dollar Spot Index.
Brent crude edged up to $105.60 per barrel after falling more than 5% earlier. Trump's statement that the US was in the "final stages" of negotiations with Iran raised expectations that energy flows through the Strait of Hormuz would soon be restored. This helped dampen the risk premium on oil, even though physical supplies are still experiencing distribution disruptions.
Optimism about a deal in the Middle East sparked a market rebound after four days of losses, amid concerns about rising bond yields and high tech stock valuations. Investors also assessed inflation risks from high oil prices, lowering bets on interest rate cuts and raising the possibility of further rate hikes.
In the US, the S&P 500 rose more than 1% and the Nasdaq 100 gained 1.7% on Wednesday, while the chip index jumped 4.5%. Nvidia projected sales for the July quarter to about $91 billion, exceeding analysts' estimates of $87 billion, and increased its quarterly dividend and announced an $80 billion share purchase.
Despite the strengthening equity markets, investors noted that the earlier optimism came without clear signs of progress in negotiations. The uncertain nature of the negotiations keeps uncertainty high, with the potential for escalation of the conflict a risk factor to monitor.
Key Points:
- Asian markets rose on US-Iran optimism.
- Oil and US bond yields fell.
- Nvidia weakened despite above-estimated sales projections.
- Korean and Samsung stocks surged after the labor deal.
- Investors remain wary of the risks of conflict and inflation. (asd)*
Source: Newsmaker.id
