Asian stock markets exhibited a predominantly positive trend on Friday, mirroring gains on Wall Street, while oil prices also climbed in anticipation of crucial peace negotiations between the United States and Iran. The talks, scheduled to commence in Islamabad, Pakistan, this weekend, aim to establish a permanent ceasefire in the ongoing Iran war, with U.S. Vice President JD Vance leading the American delegation.
Market Performance Across Asia
In South Korea, the Kospi index surged by 1.8% to reach 5,879.71, while Japan's Nikkei 225 increased by 1.6% to 56,789.58. Notably, shares of Fast Retailing, the parent company of the Japanese clothing retailer Uniqlo, skyrocketed more than 10% following an upward revision of the group's annual profit forecasts.
Hong Kong's Hang Seng index advanced 0.7% to 25,919.12, and the Shanghai Composite index in China rose by 0.6% to 3,991.14. Concurrently, China reported that its consumer price index, a key measure of inflation, increased by 1% in March compared to the previous year. This figure was lower than analysts had anticipated and marked a decline from the 1.3% rise recorded in February.
Other regional markets showed mixed results. Australia's S&P/ASX 200 declined by 0.4%, whereas Taiwan's Taiex index gained 1.3%, and India's Sensex index rose by 0.7%.
Oil Prices and Geopolitical Tensions
Oil prices experienced a modest uptick on Friday, with Brent crude, the international benchmark, rising by 0.5% to $96.42 per barrel. Benchmark U.S. crude increased by 0.4% to $98.28 per barrel. This rise comes against a backdrop of geopolitical uncertainty, as a fragile two-week ceasefire in the Iran war faces challenges following deadly Israeli strikes on Lebanon earlier in the week.
Adding to the complexity, Iran maintains control over the Strait of Hormuz, a critical waterway for global oil and gas transport, which remains largely closed despite U.S. demands for its reopening. In a related development, Israeli Prime Minister Benjamin Netanyahu announced that he has authorised talks with Lebanon, with negotiations expected to take place in Washington next week.
Analyst Insights on Oil Markets
Ajay Rajadhyaksha of Barclays provided a sobering perspective in a recent research note, stating that oil prices are unlikely to return to pre-war levels of $65-70 per barrel. He emphasised that "a ceasefire is not a refund" and that "ceasefires end wars; they don't undo them." Barclays predicts that Brent crude could average around $85 per barrel for the year.
Wall Street and Other Market Movements
On Thursday, Wall Street recorded gains driven by optimism surrounding the Iran war ceasefire. The S&P 500 added 0.6% to close at 6,824.66, the Dow Jones Industrial Average climbed 0.6% to 48,185.80, and the Nasdaq composite gained 0.8% to 22,822.42.
In corporate news, shares of Constellation Brands, which sells Modelo and Corona beers in the U.S., jumped 8.5% after reporting better-than-expected quarterly results. Additionally, cloud services provider CoreWeave rose by 3.5% following the announcement of an expanded deal with Meta Platforms extending through 2032, with Meta's shares increasing by 2.6%.
In other market dealings, precious metals saw declines. Gold prices fell by 0.5% to $4,791.90 per ounce, while silver prices dropped by 0.6% to $76.02 per ounce. Currency markets also showed movement, with the U.S. dollar strengthening to 159.18 Japanese yen from 158.96 yen, and the euro trading slightly lower at $1.1694 compared to $1.1699.
