Asian Stocks Rise on Ceasefire Optimism
Most Asian stock markets moved higher on Friday, supported by cautious optimism ahead of potential ceasefire talks between Iran and the United States. Regional equities were also on track to deliver strong weekly gains.
China Leads Gains Despite Mixed Inflation Data
Chinese equities were among the top performers, even as March inflation data presented a mixed outlook for the world’s second-largest economy. While some indicators showed weakness, others pointed to early signs of stabilization.
Wall Street Momentum Supports Asian Markets
Asian markets followed a positive lead from Wall Street, where stocks extended gains for a seventh straight session on Thursday. Investor sentiment improved after Israel signaled its intention to pursue a ceasefire with Lebanon, a key demand from Iran in broader negotiations.
S&P 500 futures were largely unchanged during Asian trading hours, as investors remained focused on upcoming talks between Tehran and Washington, expected to take place in Pakistan. However, uncertainty remains high, with both sides holding conflicting positions and Iran yet to confirm its participation.
Focus Shifts to Key US Inflation Data
Beyond geopolitical developments, markets are also closely watching the release of U.S. Consumer Price Index (CPI) data. The report is expected to provide further direction for global markets, particularly regarding inflation trends and monetary policy expectations.
South Korea and Japan Lead Weekly Gains
South Korea’s KOSPI index was the standout performer, rising 1.9% on Friday and heading for an impressive weekly gain of nearly 10%. The rally was supported by strong demand for technology stocks, while markets showed little reaction to the Bank of Korea keeping interest rates unchanged at 2.50%.
Japan’s Nikkei 225 advanced 1.5% and was on track for a 7% weekly gain. However, the broader TOPIX index remained flat after data showed a stronger-than-expected increase in producer inflation, raising concerns about energy-driven price pressures and potential interest rate hikes by the Bank of Japan.
Shares of Fast Retailing, the parent company of Uniqlo, led gains in the Nikkei after reporting solid earnings and raising its annual profit forecast.
Mixed Performance Across Other Asian Markets
Australia’s ASX 200 slipped 0.3% on Friday but remained on track for a weekly gain of over 4%. Singapore’s Straits Times Index traded flat, with a modest weekly increase of around 0.7%.
India’s Nifty 50 futures declined 0.2%, although the index was still set to post gains of more than 5% for the week.
Bargain Buying and Ceasefire Hopes Drive Sentiment
Asian markets were supported by expectations of a potential ceasefire in the Iran conflict, even though a long-term resolution remains uncertain. Limited oil flows through the Strait of Hormuz continue to add to market concerns.
Additionally, strong bargain buying following sharp losses in March helped lift regional equities throughout the week.
China Inflation Data Shows Mixed Signals
China’s major stock indexes, including the Shanghai Shenzhen CSI 300 and the Shanghai Composite, rose 1.2% and 0.7% respectively on Friday. Both indexes were also up between 3% and 4% for the week.
Data released on Friday showed that China’s consumer inflation declined in March compared to the previous month, indicating that the boost from Lunar New Year spending was short-lived.
At the same time, producer price inflation rose more than expected, driven in part by higher global oil prices. While deflationary pressures persist in China, the improvement in producer prices suggests some recovery in industrial activity.
