Asian Stocks Hit Six-Week High as Iran Talk Hopes Lift Risk Appetite
Sydney— Asian shares rose to a six-week high on Wednesday, tracking gains on Wall Street as expectations of renewed US-Iran peace talks eased oil prices and supported investor sentiment, while the US dollar stabilized after a prolonged decline.
Comments by Donald Trump that negotiations with Iran could resume in Pakistan within days helped calm markets following last week’s breakdown in talks and the imposition of a US blockade on Iranian ports. Officials in Pakistan and Iran also indicated discussions may restart.
Lower geopolitical risk expectations pushed benchmark oil prices down, with Brent crude falling below $100 per barrel to around $94 after a sharp overnight decline. The drop in energy prices helped alleviate concerns about inflationary pressures tied to the Middle East conflict.
Equity markets across the region advanced, with MSCI’s broadest index of Asia-Pacific shares outside Japan rising 1.5% to its highest level in six weeks. Japan’s Nikkei 225 climbed 1.2%, approaching its late-February record, while China’s blue-chip index and Hong Kong’s Hang Seng also posted gains.
The positive momentum followed a strong session on Wall Street, where the Nasdaq rose 2% to extend its winning streak and the S&P 500 edged close to record highs, supported by softer-than-expected US producer inflation data.Analysts said markets were increasingly looking beyond immediate conflict risks.
“The impressive price action in risk assets suggests markets are keen to look through the immediate impact of the Middle East conflict,” said Tony Sycamore, an analyst at IG, pointing to expectations of a potential diplomatic resolution.
Government bond markets also reflected improving sentiment. US Treasury yields declined, with the two-year yield easing to 3.704% and the 10-year yield falling to around 4.24%, as investors responded to easing inflation concerns and prospects of de-escalation.
The US dollar steadied after a seven-day losing streak, while the euro hovered near recent highs. Gold prices edged slightly higher, indicating some residual demand for safe-haven assets.
Despite the market optimism, risks remain elevated. The International Monetary Fund warned that the global economy could approach recession if the conflict escalates further, particularly with disruptions to oil flows through the Strait of Hormuz.
