HONG KONG (AP) – Asian shares experienced a significant increase on Friday, influenced by substantial gains in Wall Street, while oil prices saw a decline following U.S. President Donald Trump's announcement that a breakthrough had been achieved in the negotiations aimed at ending the Iran war.
The positive sentiment in the markets was reflected in U.S. futures, which edged higher. Notably, South Korea's Kospi index surged by 7.8% to finish at 8,370.82, significantly reducing losses sustained earlier this month due to sell-offs in shares associated with artificial intelligence (AI). Over the past six months, the Kospi has nearly doubled and achieved a record closing high of 8,801.49 on June 2.
Key players in South Korea saw notable gains, with Samsung Electronics— the nation's most valuable company—rising by 11.2%. Meanwhile, chipmaker SK Hynix also experienced a 7.2% increase in its stock value.
Japan's Tokyo Stock Exchange mirrored these positive movements, with the Nikkei 225 climbing by 3.5% to close at 66,442.95, driven largely by advancements in technology stocks. The multinational investment firm SoftBank Group, which emphasizes AI, was up by 2%, while chip equipment manufacturer Tokyo Electron enjoyed a remarkable 10.3% boost.
In Hong Kong, the Hang Seng index increased by 1.8% to settle at 24,689.32, while the Shanghai Composite index rose 1.6% to 4,050.51. Additionally, in Australia, the S&P/ASX 200 advanced by 1.9% to reach 8,798.10. Taiwan's Taiex added 2.6%, and India’s Sensex rose by 1.2%.
This renewed investor enthusiasm was sparked by Trump’s statement on Thursday, where he indicated that military strikes against Iran had been called off. Trump claimed there had been a “great settlement of the war with Iran,” hinting at a possible extension of the fragile ceasefire between the two parties in the coming days, though he provided few specifics. However, analysts expressed skepticism, noting that Trump had previously made similar claims, only for hostilities to resume, although they acknowledged that recent developments appeared more positive.
The analysts from ING, Warren Patterson and Ewa Manthey, cautioned against assuming that an extension of the ceasefire was guaranteed, emphasizing any agreement could potentially be fragile.
In terms of oil prices, Brent crude, which serves as the international benchmark, decreased by 1.7%, trading at $88.87 per barrel on Friday morning. This price remains significantly elevated compared to the approximately $70 per barrel range prior to the war's inception in late February. Meanwhile, benchmark U.S. crude dropped 1.6% to $86.33 per barrel.
On Wall Street, the benchmark S&P 500 Index witnessed an impressive surge of 1.8%, climbing to 7,394.30, marking a return to early May levels. The Dow Jones Industrial Average also rallied by 1.9%, closing at 50,848.75, while the technology-driven Nasdaq composite increased by 2.5% to 25,809.66.
Despite the volatile nature of AI and tech stocks in recent weeks, partly due to concerns that inflated investments and soaring stock prices could indicate an impending bubble, specific tech stocks saw notable movements. For instance, U.S. chipmaker Marvell Technology surged by 11.1%, while Oracle Corporation faced an 8.5% decline due to worries surrounding high expenditures despite delivering stronger-than-expected quarterly results.
Moreover, investors in the U.S. and other global markets are eagerly anticipating the significant debut of SpaceX, the rocket company founded by Elon Musk, on Wall Street. The IPO is projected to be the largest on record, aiming to raise around $75 billion.
In currency transactions on Friday, the U.S. dollar strengthened, rising to 160.22 Japanese yen from 159.93 yen, while the euro traded at $1.1574, a slight decrease from $1.1578.
___
AP Business Writers Stan Choe and Alex Veiga contributed to this report.
Chan Ho-him, The Associated Press
