Asian stocks rise, but gains capped on Gulf situation

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent, led by a 1.9 per cent jump for Kospi

Asian stocks ticked up early on Friday but gains were capped as traders questioned the durability of this week’s US-Iran ceasefire and remained wary of fragile hopes for regional peace talks.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent, led by a 1.9 per cent jump for Kospi. Nikkei 225 tacked on 1.5 per cent.

The US-Iran ceasefire led to a sharp recovery in Asian markets but the risk-on sentiment got tested yesterday, said Rupal Agarwal, Asia quant strategist at Bernstein in Singapore.

We believe this could be the beginning of the end and is presenting an opportunity for investors to focus on pre-war trends and fundamentals, she said. We recommend adding back some beaten-down names.

Brent crude gained 1 per cent to 96.83 a barrel as trading resumed in Asia after attacks on Israel.

The Strait of Hormuz remains largely closed to shipping, with marine traffic at well below 10 per cent of normal volumes on Thursday as Iran asserted its control of the strategic waterway that typically carries one-fifth of global oil and gas shipments.

The closure of the strait during the six-week Iran war sent shockwaves through global markets as oil prices surged and energy supplies tightened.

The US dollar index, which measures the currency’s strength against a range of other currencies, was up 0.1 per cent at 98.92, after data released on Thursday showed weekly jobless claims increased by 16,000 to 219,000 and continuing claims fell by 38,000 to 1.794 million, the lowest level since May 2024.