Asian Stocks Rise, Oil Falls: Here's Why!
Asian stocks rose while oil prices weakened after news emerged that the US and Iran had reached a tentative agreement to extend the ceasefire. Risk-on sentiment strengthened as markets assessed the likelihood of a de-escalation in the conflict, which could reduce disruptions to energy flows.
Indexes in Japan and South Korea rose, pushing the MSCI Asia Pacific Index up 0.7%. Asia's gains followed Wall Street's rally, after the S&P 500 and Nasdaq 100 closed at new records, with interest in AI-themed stocks remaining strong.
In commodities, Brent fell 0.4% to around US$93.40/barrel on Friday. The decline came on hopes that a 60-day ceasefire extension and continued talks on Tehran's nuclear program could bring the three-month-old conflict closer to a resolution, although President Donald Trump has reportedly not yet agreed to the terms of the deal.
In the foreign exchange market, the yen held steady at around 159.25 per dollar after a key Tokyo inflation indicator unexpectedly fell for the sixth straight month. In the previous US session, Treasury yields fell across all tenors and the dollar weakened against major developed currencies.
Market participants considered optimism over a temporary ceasefire to outweigh concerns about clashes in the Persian Gulf. The closure of the Strait of Hormuz since the war began has pressured oil shipments and fueled inflation fears; therefore, investors are monitoring signals of the corridor's reopening, although a history of often deadlocked negotiations leaves the market vulnerable to swings in sentiment.
On the macro front, higher energy costs have added to price pressures and fueled concerns that the Fed's room for maneuver is limited. The latest data showed US consumer spending rose slightly in April, with annual inflation rising to its highest level since 2023, while the first-quarter economy grew 1.6% (slower than previously estimated). Futures also reflected mixed sentiment: Hang Seng futures rose 0.6%, Topix futures rose 0.5%, ASX 200 futures rose 0.8%, while Euro Stoxx 50 futures fell 0.4%.
5 key points:
- Asian stocks rose; The MSCI Asia Pacific rose 0.7%, following new records for the S&P 500 and Nasdaq 100.
- Oil weakened: Brent fell 0.4% to around US$93.40 following news of a 60-day extension of the US-Iran ceasefire.
- Uncertainty remains as Trump has not yet agreed to the terms of the deal.
- The yen held steady at 159.25 per dollar; Treasury yields had previously fallen and the dollar weakened in the US session.
- The Strait of Hormuz remains in focus due to its links to energy supplies and inflation, which could influence Fed interest rate expectations. (asd)*
Source: Newsmaker.id
