Asia-Pacific Stocks Rise Across the Board Monday as Easing Middle East Tensions Boost Market Sentiment

TradingKey - On April 20, major Asia-Pacific stock markets rose across the board on Monday, bolstered by widespread gains in global equity markets over the weekend and rising expectations among investors that tensions in the Middle East are easing.

Japan's two major stock indices rebounded. The Nikkei 225 closed up 0.60% at 58,824.89, while the TOPIX rose 0.43%. Gains in large-cap stocks such as Fast Retailing, Toyota, and SoftBank were prominent, driving the Nikkei up nearly 700 points at one stage to surpass 59,100, though gains narrowed in the late afternoon session. Sector-wise, a majority of the 33 industry groups on the Tokyo Stock Exchange rose, with machinery, air transportation, and textiles leading the gains, while mining, marine transportation, and oil and coal products declined.

Source: TradingView

South Korea's KOSPI index extended its strength on Monday, closing up 0.44% at 6,219.09, an increase of 27.17 points from the previous session, reclaiming the 6,200 psychological level for the first time in over a week.

In Chinese markets, the three major A-share indices showed mixed performance. The Shanghai Composite Index closed at 4,082.13, up 0.76%, with a turnover of 1.08 trillion yuan; the Shenzhen Component Index closed at 14,966.75, up 0.55%; and the ChiNext Index edged down 0.02% to close at 3,677.58. Combined turnover for both markets reached approximately 2.58 trillion yuan, with more than 3,400 stocks advancing across the market.

In Hong Kong, the Hang Seng Index closed up 0.77% at 26,361.07, while the Hang Seng Tech Index rose 0.46% to 5,065.63. Technology stocks were active, with Tencent Holdings rising 2.35% to HK$522.5. Photovoltaic solar stocks were strong, with Flat Glass jumping over 8% and Xinyi Solar rising more than 6%.

Source: TradingView

Australia's S&P/ASX 200 index closed up 6.4 points, or 0.07%, at 8,953.3, ending virtually flat. New Zealand's S&P/NZX 50 index rose more than 0.6% in early trading before paring most of those gains to finish approximately 0.1% higher near 12,915.

The primary driver behind the broad recovery in Asia-Pacific markets was the increased expectation among investors that tensions in the Middle East would ease. In the previous session, the Nasdaq rose 1.5% and the S&P 500 gained 1.2%, sending positive signals to the Asia-Pacific markets.

However, the situation in Iran showed signs of recurring volatility, with Iran once again blocking the Strait of Hormuz over the weekend. WTI crude oil prices surged over 8% at one point, while Brent crude rose more than 7% to around $96 per barrel. U.S. stock futures subsequently retreated, with Dow futures falling nearly 400 points at one stage.

On the news front, the interim ceasefire agreement reached between the U.S. and Iran is set to expire on April 22, and Iran has refused to participate in the second round of negotiations. On April 19, the U.S. military intercepted and seized the Iranian cargo ship 'TOUSKA' in the Gulf of Oman, boarding the vessel after firing into the engine room; Iran condemned the move as 'maritime piracy' and warned of retaliation.

Market sentiment was dominated by geopolitical risks. Asia-Pacific stock markets initially dipped in early trading before rebounding amid volatility, suggesting that bulls still harbor hopes for the negotiation outlook. However, caution remains regarding the surge in oil prices and the plunge in U.S. stock futures, with subsequent developments depending on whether the ceasefire agreement can be extended.