Asian Markets Mixed as Oil Prices Surge Following Escalation in Iran Conflict

BY COMFORT OGBONNA

Asian stock markets traded in mixed territory on Monday after Wall Street extended its record-breaking rally, while global oil prices surged sharply following renewed geopolitical tensions involving Iran. The latest market movements were driven by investor reactions to escalating uncertainty after U.S. President Donald Trump rejected Tehran’s response to a recent U.S. proposal aimed at ending the ongoing war in Iran.

U.S. futures slipped slightly, down around 0.1%, as investors weighed the impact of rising energy prices and geopolitical risks against strong corporate and labor market data that has continued to support equities.

In Japan, the Nikkei 225 declined 0.5% to 62,417.88, after briefly touching another intraday record above 63,300 earlier in the session. Despite the pullback, the index remains near historic highs, supported in recent weeks by strong technology sector performance. However, shares of SoftBank Group, one of Japan’s most influential tech-focused investment companies, dropped more than 6%, weighing on the broader market.

South Korea’s Kospi index stood out with a strong performance, jumping 4.3% to 7,822.24 after also hitting an all-time intraday high. The rally was led by major technology names such as Samsung Electronics and memory chip giant SK Hynix, as continued global demand for artificial intelligence-related products fuels investor optimism in the sector. Over the past month, both the Nikkei and Kospi have surged more than 10% and 30% respectively, reflecting strong momentum in tech-driven markets despite global geopolitical tensions.

In China, markets also moved higher. Hong Kong’s Hang Seng index edged up less than 0.1% to 26,401.76, while the Shanghai Composite rose 1.1% to 4,225.02. Gains were supported by stronger-than-expected economic data, including a 2.8% rise in China’s factory gate prices in April compared to a year earlier—the highest level since 2022. Export figures released over the weekend also exceeded expectations, boosting investor confidence in the region’s recovery outlook.

Elsewhere in the region, Australia’s S&P/ASX 200 slipped 0.5%, Taiwan’s Taiex gained 0.5%, and India’s Sensex fell 1.3%, reflecting a mixed regional response to global uncertainty.

Global oil markets saw the most dramatic moves of the day, with prices jumping more than 3% amid heightened concerns over the Iran conflict. Brent crude rose 3.6% to $104.89 per barrel, significantly higher than the roughly $70 level seen before the war began in late February. U.S. benchmark crude also climbed 3.9% to $99.15 per barrel.

The spike in oil prices was triggered after a social media post by Trump described Iran’s response to a U.S. proposal as “TOTALLY UNACCEPTABLE,” fueling fears that diplomatic efforts may be stalling. Market analysts warn that continued instability in the region, combined with restrictions affecting the Strait of Hormuz—a critical global shipping route for oil and gas—could keep energy prices elevated for an extended period.

Attention is also turning toward upcoming high-level diplomatic talks, including a meeting between Trump and Chinese leader Xi Jinping later this week. China maintains strong economic ties with Iran, and Washington has reportedly urged Beijing to use its influence to help ease tensions and encourage the reopening of key maritime routes.

Analysts suggest that while there is some hope that diplomatic engagement could help reduce tensions, the situation remains highly unpredictable. Oil markets, they note, continue to react sharply to developments, with sentiment largely driven by breaking headlines rather than long-term fundamentals.

On Wall Street, the previous trading session ended with strong gains, extending record highs across major indexes. The S&P 500 rose 0.8% to 7,398.93, marking another all-time high, supported by optimism over the resilience of the U.S. economy following a stronger-than-expected jobs report. The Dow Jones Industrial Average inched up less than 0.1% to 49,609.16, while the Nasdaq Composite climbed 1.7% to close at a record 26,247.08, driven by continued strength in technology stocks.

In currency markets, the U.S. dollar strengthened to 157.06 Japanese yen from 156.61 yen in the previous session. The euro weakened slightly to $1.1769 from $1.1780, reflecting ongoing volatility in global financial markets as investors respond to geopolitical and economic developments.