TOKYO (AP) — Asian shares mostly advanced on Tuesday, with Japan’s benchmark Nikkei 225 briefly surpassing 70,000 points for the first time before retracting some of those gains after the Bank of Japan announced an increase in its key interest rate to 1%. This quarter percentage point hike marked the highest level for the benchmark rate in three decades.
By early afternoon, the Nikkei 225 index was up 0.6% at 69,713.05 points. South Korea's Kospi extended its record growth, gaining 2.1% to reach 8,721.64 points. Meanwhile, the Shanghai Composite in China gained less than 0.1%, resting at 4,100.53 points. However, Australia’s S&P/ASX 200 index saw a decline of 0.3%, settling at 8,892.10 points, while Hong Kong’s Hang Seng index fell by 1.3%, ending at 24,533.35 points. In Taiwan, the Taiex index rose 0.6%, and India’s Sensex was up 0.5%.
On the previous day, stock markets worldwide experienced a significant rally, coinciding with a decline in oil prices after the United States and Iran reached a tentative agreement aimed at resuming the global flow of crude oil. The S&P 500 climbed by 1.7%, the Dow Jones Industrial Average gained 0.9%, achieving a record high, and the Nasdaq composite surged by 3.1%.
Brent crude prices fell by 4.8% amid expectations that this agreement may facilitate the reopening of the Strait of Hormuz, a critical passage through which much of Asia acquires its oil. However, analysts urged caution as many uncertainties remain regarding the ongoing negotiations with Iran, which are set to continue over the next 60 days. Furthermore, even if the Strait of Hormuz reopens as anticipated on Friday, it may take months for the energy sector to return to full operational capacity.
Oil prices have seen a recent decline due to optimism about a potential extension of the ceasefire in the ongoing conflict, dropping from over $100 a barrel a few weeks prior. Prior to the outbreak of the war, crude oil was trading at approximately $70 a barrel. Early Tuesday saw benchmark U.S. crude trading down by 9 cents at $80.66 per barrel, while Brent crude, the international standard, decreased by 24 cents to $82.93 per barrel.
In related U.S. stock market activities on Monday, shares connected to the artificial intelligence sector experienced substantial gains. Notable performers included Micron Technology, which soared by 10.8%, and Advanced Micro Devices (AMD), which increased by 7%. Nvidia’s share price rose by 3.5%, contributing significantly to the upward movement of the S&P 500 due to its position as Wall Street’s most valuable company, thereby holding considerable influence over the index. Additionally, SpaceX, Elon Musk’s aerospace company that also encompasses the AI firm xAI, saw its stock price rise by 19.6% in its second day of public trading.
In the bond market, Treasury yields showed a downward trend, attributed to hopes that declining oil prices will relieve central banks from the pressure of raising interest rates. The yield for the 10-year Treasury note eased to 4.47% from 4.48% observed late Friday.
In early Tuesday currency trading, the U.S. dollar remained relatively stable, standing at 160.33 Japanese yen. The euro fell to $1.1580 from its previous value of $1.1592.
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