(April 21): Asian stocks rose as signs Iran may join talks with the US fostered cautious optimism about progress in the Middle East ahead of a looming ceasefire deadline. Oil dropped.
The MSCI Asia Pacific Index climbed 0.5%, with advancers and decliners roughly even. The Kospi Index in South Korea — the world’s best-performing gauge over the past year — rose 1.8% to a record with chip stocks gaining as the artificial intelligence trade regained momentum. Apple Inc shares slipped in late US trading after naming John Ternus its next CEO.
Global crude oil benchmark Brent fell 0.6% to US$94.88 a barrel as signs Iran may join negotiations with the US before the two-week ceasefire deadline lifted sentiment. Oil is well below last month’s peak of nearly US$120 a barrel. Treasuries steadied and the dollar was little changed.
Attention is shifting to whether the US and Iran can resume negotiations in Pakistan to calm strains and reopen the Strait of Hormuz after an initial round in Islamabad ended without a deal. The dollar has weakened over the past three weeks and several equity gauges have recouped war-related losses as markets price in easing tensions, cheaper oil and stronger economic growth.
“Going into peace talks is clearly a positive sign that we are going to have some kind of resolution,” said Noriko Chen, a portfolio manager for equities at Capital Group. “While we expect inflation to be running a little bit higher than we have seen in the recent past, we don’t think it will end up having a big impact on the global economy.”
President Donald Trump said he is unlikely to extend the truce with Iran if no agreement is reached before its expiry Wednesday evening, Washington time.
See also: Stocks fall with bonds as Iran concerns boost oil
Transits through the Strait of Hormuz have reduced to a trickle as Iran tightens control in retaliation for strikes. On Friday, that paralysis appeared to end, with Tehran saying it would reopen the waterway, before reversing course during the weekend as the US maintained a naval blockade and attacked an Iranian ship.
In other corners of the market, gold was steady around US$4,820 an ounce. S&P 500 contracts rose 0.2% after the underlying index slipped on Monday from a record high, weighed down by declines in several technology heavyweights.
In Asia, tech stocks led the gains, with MSCI’s technology index for the region rising 2.1% to extend its year-to-date advance to more than 38%. Earlier, the Philadelphia Semiconductor Index advanced, notching a 14th straight session in the green — a winning streak that it has exceeded just once, in 2014.
See also: Stocks rise on big earnings day as war talks stall
“AI is back in focus,” said Fabien Yip, a market analyst at IG International. “Asia tech being a core supplier of hardware is riding the wave higher amid the overall risk-on environment.”
This week’s marquee economic report is also due Tuesday. Analysts project a jump in overall retail sales for March. Excluding gasoline and autos, the data could signal more tepid demand as high fuel costs prompted budget-constrained consumers to squeeze spending on other things.
While investors remain focused on developments in the Middle East, attention may also turn to Kevin Warsh, President Donald Trump’s nominee to lead the Federal Reserve. Warsh is scheduled to testify before the Senate Banking Committee at 10am Tuesday.
“I believe that monetary policy independence is earned — and better policy decisions crafted — by steering clear of distractions,” according to a copy of his prepared remarks viewed by Bloomberg. “I am committed to ensuring that the conduct of monetary policy remains strictly independent.”
Corporate highlights:
- Amazon.com Inc is investing an additional US$5 billion ($6.35 billion) in Anthropic PBC, and may inject US$20 billion more over time, a deal that deepens the companies’ ties in an increasingly competitive artificial intelligence industry.
- Victory Giant Technology Huizhou Co, a Chinese supplier of Nvidia Corp, surged 57% in its Hong Kong trading debut after raising US$2.6 billion in the city’s largest listing in seven months.
Some of the main moves in markets:
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Stocks
- S&P 500 futures rose 0.2% as of 10.50am Tokyo time
- Japan’s Topix rose 0.1%
- Australia’s S&P/ASX 200 fell 0.1%
- Hong Kong’s Hang Seng rose 0.3%
- The Shanghai Composite fell 0.2%
- Euro Stoxx 50 futures rose 0.4%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at US$1.1783
- The Japanese yen was little changed at 158.95 per dollar
- The offshore yuan was little changed at 6.8160 per dollar
Cryptocurrencies
- Bitcoin fell 0.3% to US$76,055.38
- Ether fell 0.7% to US$2,321.71
Bonds
- The yield on 10-year Treasuries was little changed at 4.25%
- Japan’s 10-year yield declined two basis points to 2.375%
- Australia’s 10-year yield declined one basis point to 4.92%
Commodities
- West Texas Intermediate crude fell 1.4% to US$88.40 a barrel
- Spot gold fell 0.2% to US$4,812.77 an ounce
Uploaded by Chng Shear Lane
