Asian stocks presented a mixed picture on Monday, following a record-setting session on Wall Street, while oil prices surged more than 4% after U.S. President Donald Trump dismissed Tehran's reply to the latest American proposal aimed at ending the conflict in Iran. U.S. futures edged lower in early trading.
Japan and South Korea Markets
Tokyo's Nikkei 225 declined by 0.4% to 62,486.84, having briefly touched another intraday record high above 63,300. The drop was led by a more than 5% fall in SoftBank Group, a major technology-focused investment holding company. In contrast, South Korea's Kospi surged 4.1% to 7,804.71, also hitting an all-time intraday high, buoyed by gains in tech-related stocks such as Samsung Electronics and memory chip manufacturer SK Hynix.
Despite the ongoing Iran war, technology stocks and growing interest in artificial intelligence have supported markets in Japan and South Korea. Over the past month, the Nikkei 225 and Kospi have risen more than 10% and 30%, respectively.
China and Other Asian Markets
Hong Kong's Hang Seng index fell 0.3% to 26,319.93, while the Shanghai Composite index climbed 0.9% to 4,219.13. The gains in Shanghai followed official data released Monday showing that China's factory gate prices rose 2.8% in April from a year earlier, the highest since 2022, along with better-than-expected export figures reported over the weekend.
Australia's S&P/ASX 200 lost 0.6%. Taiwan's Taiex traded 0.9% higher, while India's Sensex fell 1.3%.
Oil Prices Surge
Oil prices jumped early Monday due to uncertainties surrounding the Iran war, after Trump wrote on social media that Iran's response on Sunday to the U.S.'s latest proposal was “TOTALLY UNACCEPTABLE!” Brent crude, the international benchmark, gained 4.2% to $105.57 per barrel, having been around $70 before the war began in late February. Benchmark U.S. crude rose 4.7% to $99.89 a barrel.
With the Strait of Hormuz, a crucial waterway for global oil and gas transport, still largely closed and the U.S. continuing its sea blockade of Iranian ports, analysts believe oil prices are likely to remain elevated for an extended period.
Geopolitical Context
The Iran war is also expected to be on the agenda when Trump meets with Chinese leader Xi Jinping later this week. China has close economic ties with Iran, and the U.S. has been urging Beijing to use its influence to help reopen the Strait of Hormuz.
“There remains a glimmer of hope that talks between Trump and Chinese President Xi later this week could yield positive results on Iran,” ING commodities analysts Warren Patterson and Ewa Manthey wrote in a note on Monday. “The hope is that China can use its influence over Iran to push it closer towards a peace deal,” they said. “Clearly, this is easier said than done.” The oil market is still very much “heavily headline-driven,” the pair added.
Wall Street Records
On Friday, Wall Street reached new records, with the benchmark S&P 500 adding 0.8% to 7,398.93 and hitting its latest all-time high. The gains were fueled by market optimism following a solid U.S. job market report that exceeded analyst expectations despite shocks from the Iran war. The Dow Jones Industrial Average edged up less than 0.1% to 49,609.16, while the technology-heavy Nasdaq composite climbed 1.7% to its own record at 26,247.08.
Currency Markets
In currency trading, the U.S. dollar rose to 157.14 Japanese yen from 156.61 yen. The euro was trading at $1.1756, down from $1.1780.
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AP Business Writers Stan Choe and Matt Ott contributed to this report.
