HONG KONG (AP) - Asian stock markets mostly showed gains on Thursday, with oil prices stabilizing amid expectations for an extension of the ceasefire in the Iran war as well as the prospect of renewed negotiations between the U.S. and Iran. The Tokyo Stock Exchange saw its Nikkei 225 index rise significantly, climbing 2.4% to 59,549.59, while South Korea’s Kospi increased by 2% to reach 6,215.38.
In Hong Kong, the Hang Seng index rose by 1.2% to 26,269.99, and the Shanghai Composite index climbed 0.6% to 4,050.42. China's economic growth for the January-March quarter was reported at 5%, indicating an acceleration from the previous quarter. While some economists have noted that China has largely absorbed the initial effects of the Iran war, concerns are rising that its extensive export sector could face challenges due to slower global economic growth in the coming months.
Taiwan’s Taiex also recorded a modest gain of 0.9%, while Australia's S&P/ASX 200 experienced a minor decline of 0.1%. Reports on Wednesday indicated that U.S. and Iranian officials had reached an "in principle agreement" to extend a two-week ceasefire deal that is set to expire next week, with progress being made toward further talks between the two nations.
U.S. Treasury Secretary Scott Bessent cautioned that Washington is gearing up to impose secondary sanctions on businesses engaging with Iran, specifically targeting those from China purchasing Iranian oil, in an effort to increase economic pressure on Tehran.
On Thursday morning, oil prices steadied with Brent crude, the international benchmark, slightly rising by less than 0.1% to $94.94 per barrel. Benchmark U.S. crude saw a 0.4% increase, reaching $91.66 a barrel. Since the onset of the Iran war in late February, oil prices have surged, significantly influenced by the blockade of the Strait of Hormuz, a critical passage for global oil supplies. Recently, the U.S. imposed a sea blockade on Iranian ports to compel Tehran to reopen the strait and accept a proposed deal.
Analysts from ING Bank, Warren Patterson and Ewa Manthey, pointed out that a significant risk for the markets lies in a potential breakdown of peace negotiations between the U.S. and Iran, noting that the demands from both sides remain quite different.
On Wall Street, optimism concerning developments toward a long-term ceasefire contributed to a record high for the S&P 500 index, which rose by 0.8% to 7,022.95, surpassing its previous all-time high set in January. The Nasdaq composite increased by 1.6% to 24,016.02, while the Dow Jones Industrial Average edged down by 0.2% to 48,463.72.
Bank of America shares climbed 1.8% following the bank's announcement of better-than-expected quarterly results, with CEO Brian Moynihan highlighting signs of a "resilient American economy," supported by solid consumer spending. Morgan Stanley shares also experienced an uptick of 4.5%, attributed to similar positive quarterly results.
In an interesting market development, shares of San Francisco-based footwear company Allbirds soared by 582% to nearly $17 after announcing a strategic shift toward artificial intelligence and a forthcoming rebranding to NewBird AI.
Other commodities also saw positive movements, with gold prices climbing by 0.5% to $4,846.40 an ounce, while silver prices rose by 1.3% to $80.62 per ounce. Meanwhile, the U.S. dollar weakened against the Japanese yen, dropping to 158.58 from 159 yen. The euro traded higher, reaching $1.1814, up from $1.1799.
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AP Business Writer Stan Choe contributed to this report.
