Most Asian stock markets experienced gains on Monday, with Japan and South Korea reaching record highs. However, broader market enthusiasm faced limitations due to rising oil prices and ongoing stalled negotiations between the U.S. and Iran.
The bullish trend in regional equities stemmed from a strong performance in the U.S. stock market, where the Nasdaq and S&P 500 set new closing records, positively affecting sentiment among technology and AI-related stocks across Asia. U.S. stock index futures showed little movement during Asian trading.
In South Korea, the KOSPI surged by 2.3%, reaching a record high of 6,630.35 points. Notably, shares of SK Hynix climbed over 6% to an all-time high, while Samsung Electronics saw a 2.5% increase. The KOSPI index had already risen nearly 5% the previous week, buoyed by robust earnings in the semiconductor sector along with advancements in AI technology from SK Hynix.
Japan’s Nikkei index also marked a significant rise, increasing as much as 1.6% to reach a record high of 60,652.98 points, with the broader Topix index gaining 0.7%. Investor attention is currently concentrated on the Bank of Japan, which is concluding a two-day monetary policy meeting on Tuesday. The central bank is widely anticipated to maintain the short-term policy rate at 0.75%, adopting a cautious approach amid economic uncertainties related to rising oil prices and tensions in the Middle East. Market participants are looking for guidance that might indicate a possible rate hike around June or July, amid persistent inflationary pressures.
Despite the positivity in Asian markets, the overarching sentiment remained cautious due to sharpened oil prices correlated with escalating supply concerns. Brent crude oil prices hovered above $107 per barrel, partly due to stalled negotiations between Washington and Tehran, while the Strait of Hormuz—a vital oil supply route—faces significant disruptions. U.S. President Donald Trump recently canceled a planned envoy trip to Pakistan aimed at furthering talks with Iran, indicating that the initiative for dialogue lies with Tehran.
In addition to regional developments, investors also focused on upcoming U.S. events including a Federal Reserve policy decision scheduled for later in the week, along with a series of earnings reports from major tech companies such as Alphabet, Microsoft, Amazon, Meta Platforms, and Apple.
In other Asian markets, both China’s and Hong Kong’s indices traded flat. Singapore’s index declined by 0.5%, while Australia’s benchmark edged down 0.2%. Futures for India’s major index increased slightly by 0.1%.
