Asian Stocks Stall as Ceasefire Doubts and Oil Rebound Weigh
Asian equities traded in a mixed and slightly weaker range on Thursday, as investors grew increasingly cautious over the fragile ceasefire involving the U.S. and Iran. A rebound in oil prices also added pressure, keeping market sentiment subdued.
Regional markets struggled to build on the strong risk-on rally seen in the previous session. Meanwhile, U.S. futures (ESM26) slipped 0.2% as uncertainty surrounding the Pakistan-brokered ceasefire persisted.
Oil Prices Rebound Amid Hormuz Disruptions
Crude oil prices recovered from earlier losses this week, as the Strait of Hormuz—a critical route for global energy shipments—remained largely restricted. Limited signs of reopening heightened concerns over supply disruptions, particularly for Asia.
The situation in Hormuz continues to be a key driver for both energy markets and broader investor sentiment.
Regional Markets Under Pressure
Across Asia, stock markets showed signs of weakness:
- South Korea’s KOSPI dropped 1.3%, led by declines in semiconductor stocks
- Japan’s Nikkei 225 fell 0.4%, while the TOPIX declined 0.6%
- China’s CSI 300 and Shanghai Composite both lost around 0.5%
- Hong Kong’s Hang Seng slipped 0.5%, dragged lower by a 3% fall in Alibaba after a target price downgrade
The broad-based pullback reflects growing caution among investors amid geopolitical uncertainty.
Ceasefire Uncertainty Limits Market Upside
Market momentum faded after Iran described ongoing ceasefire discussions as “unreasonable,” citing continued Israeli strikes on Lebanon. Tehran has insisted that Lebanon be included in the ceasefire agreement—an idea rejected by both the U.S. and Israel.
Additionally, reports indicated that the Strait of Hormuz remains largely closed, with only limited shipping activity since the ceasefire announcement.
Diplomatic Talks in Focus
U.S. and Iranian officials are expected to meet in Pakistan later this week, although details regarding the agenda and the structure of the ceasefire remain unclear.
Analysts at OCBC noted that while initial ceasefire news triggered a strong rally, ongoing geopolitical risks and fragile negotiations are capping further gains.
Broader Asian Markets Remain Cautious
Investor sentiment across the region remained fragile, with many markets still recovering from sharp losses in March.
- Singapore’s Straits Times index declined 0.3%
- Australia’s ASX 200 traded flat
- India’s Nifty 50 futures edged lower after a strong rally of nearly 4% in the previous session
India remains particularly sensitive to disruptions in oil and gas supplies, given its heavy reliance on energy imports.
