Asian Stocks Rise Despite Escalating Middle East Tensions
Most Asian stock markets traded higher on Monday despite rising geopolitical tensions in the Middle East, as strong gains in semiconductor stocks and optimism surrounding an upcoming U.S.-China summit supported investor sentiment.
Markets managed to remain relatively resilient even as oil prices surged sharply following renewed conflict concerns involving Iran and the Strait of Hormuz.
Investors also reacted positively to stronger-than-expected Chinese inflation data released earlier in the day.
Chinese Markets Gain Ahead of Trump-Xi Summit
Chinese stocks moved higher after Beijing officially confirmed that President Xi Jinping will meet U.S. President Donald Trump later this week in Beijing.
The Shanghai Shenzhen CSI 300 index rose 1.2%, while the Shanghai Composite index gained 0.7%.
Hong Kong’s Hang Seng Index, however, slipped 0.4%.
The summit between Trump and Xi, scheduled between May 13 and May 15, will mark the first major visit to Beijing by a U.S. president in nearly a decade.
The two leaders are expected to discuss trade tariffs, Taiwan, and the ongoing Middle East conflict. Markets also expect the two countries to extend the trade truce agreement reached in October 2025.
China Inflation Data Beats Expectations
Chinese economic data released Monday showed stronger-than-expected inflation figures for April.
Consumer price index (CPI) inflation accelerated above forecasts, while producer price inflation surged to its highest level in nearly four years.
Analysts said rising import and energy costs linked to the Middle East conflict played a major role in pushing inflation higher.
The data helped support Chinese equities and reinforced expectations that inflationary pressures are beginning to emerge after a prolonged period of weak price growth.
South Korea’s KOSPI Hits Record High
South Korea’s KOSPI index was the strongest-performing major market in Asia, surging nearly 5% to a new record high.
The rally was driven largely by strong gains in semiconductor stocks, which continued tracking bullish momentum from U.S. chipmakers.
SK Hynix jumped nearly 12%, while Samsung Electronics climbed almost 6%, with both companies reaching record highs.
The strong performance has been fueled by ongoing demand from the artificial intelligence industry, which has intensified global shortages in memory chips and pushed semiconductor prices higher.
Wall Street Pauses After Record Highs
U.S. stock futures edged lower during Asian trading hours after Wall Street reached fresh record highs on Friday.
S&P 500 futures slipped 0.1% as investors prepared for the release of key U.S. consumer price index inflation data scheduled for Tuesday.
The inflation report is expected to play a major role in shaping expectations regarding future Federal Reserve interest rate decisions.
Iran Conflict Keeps Oil Prices Elevated
The conflict in the Middle East continued to weigh on markets after President Donald Trump rejected Iran’s response to a 14-point peace proposal over the weekend.
At the same time, renewed military activity near the Strait of Hormuz increased concerns about global energy supply disruptions.
Oil prices climbed sharply on Monday as traders worried about prolonged instability in one of the world’s most important shipping routes for crude oil exports.
Nintendo and CSL Drag Regional Markets Lower
Japan’s Nikkei 225 index fell 0.4%, pressured mainly by a sharp drop in Nintendo shares after the gaming company reported disappointing earnings and weaker guidance.
Nintendo stock declined nearly 9% during the session.
Japan’s broader TOPIX index remained mostly unchanged.
Australia’s ASX 200 index dropped 0.7%, weighed down by heavy losses in CSL after the biopharmaceutical company unexpectedly cut its annual outlook.
Meanwhile, Singapore’s Straits Times index posted modest gains.
Indian Markets Face Pressure From Rising Oil Prices
Futures linked to India’s Nifty 50 index fell 1% in early trading, reflecting growing caution toward Indian markets.
Prime Minister Narendra Modi warned that the Middle East conflict could have significant economic consequences, particularly through rising energy prices.
India remains highly dependent on oil and gas imports from the Middle East, making the country especially vulnerable to prolonged increases in crude prices.
