Asian stock markets turned in a mixed performance Monday, with gains in Japan and South Korea offset by declines elsewhere, as oil prices slipped following encouraging developments in diplomatic talks between the United States and Iran.
American futures markets were pointing lower as trading got underway.
Japan’s Nikkei 225 index surged 1.6%, closing at 72,364.82 after briefly touching an all-time intraday high of 72,831.73. Technology stocks were a major driver of that rally, with investor enthusiasm for the global artificial intelligence sector playing a significant role.
SoftBank Group, the multinational investment and holding company with a heavy focus on AI, climbed 2.4%. Chip equipment manufacturer Tokyo Electron added 2.3%.
South Korea’s Kospi index advanced 0.4% to 9,084.37, hovering near record territory, with AI-linked stocks leading the charge. Memory chip producer SK Hynix posted an impressive 4.7% gain.
Neil Newman, managing director and head of strategy at Astris Advisory Japan, offered a measured take on the day’s gains. “We’re seeing another strong market today,” he said, while also warning that the Japanese market is “probably getting a little stretched” from an investor’s perspective, “especially with what’s going (on) in the Middle East.”
In Hong Kong, the Hang Seng index fell 1% to 23,690.86. China’s Shanghai Composite edged up 0.2% to 4,098.01. Australia’s S&P/ASX 200 slipped 0.1% to 8,822.80. Taiwan’s Taiex gained 2.8%, and India’s Sensex rose 0.6%.
Oil prices retreated as diplomats made headway toward a lasting resolution to the Iran conflict. Brent crude, the global benchmark, dropped 1.4% to $79.42 per barrel. For context, the price was hovering around $70 a barrel before the conflict began in late February.
High-stakes talks between U.S. and Iranian officials wrapped up early Monday in Switzerland, with lower-level technical discussions scheduled to continue through the rest of the week. There was some dispute over the status of the Strait of Hormuz — a vital shipping route for oil and gas — with Iran claiming the waterway had been closed again over the weekend, while the U.S. maintained that vessel traffic had continued uninterrupted.
ING commodities strategists Warren Patterson and Ewa Manthey sounded a note of caution in a Monday commentary. “Moving towards a more permanent deal will be challenging, with very real risks of a flare-up in hostilities,” they wrote.
Back in the United States, market watchers are also focused on Thursday’s release of the personal consumption expenditures price index for May — known as the PCE — which serves as the Federal Reserve’s preferred measure of inflation.
On the currency front, the U.S. dollar strengthened against the Japanese yen, rising to 161.68 yen from 161.22. The euro slipped slightly, trading at $1.1454 compared to $1.1473 previously.
