Asian Stocks Rise Despite US-Iran Tensions
Asian stock markets moved higher on Monday, supported by gains in technology shares. However, overall sentiment remained cautious as geopolitical tensions between the United States and Iran continued to escalate.
Meanwhile, U.S. stock futures declined during Asian trading hours, following record highs on Wall Street last week.
Tech Stocks Support Markets as Investors Stay Cautious
Investor confidence was tempered by major geopolitical developments over the weekend. U.S. forces seized an Iranian-flagged cargo vessel in the Gulf of Oman after it reportedly attempted to breach a naval blockade.
At the same time, Donald Trump warned of potential strikes on Iranian infrastructure if diplomatic efforts fail, adding further uncertainty to global markets.
Despite these concerns, technology stocks helped lift regional markets, tracking strong momentum from the U.S., where the S&P 500 and Nasdaq Composite recently reached record highs.
Traders appeared to largely absorb geopolitical risks, partly due to expectations that policy shifts could still occur, based on past developments.
Regional Market Performance
Major Asian indices posted gains:
- Japan’s Nikkei 225 rose 1%, while the broader TOPIX index gained 0.7%
- South Korea’s KOSPI advanced 1.1%, with SK Hynix climbing over 3% after announcing production of new server modules for next-generation chips
- China’s Shanghai Composite increased 0.8%, while the CSI 300 added 0.7%
- Hong Kong’s Hang Seng index gained nearly 1%
China Maintains Steady Monetary Policy
China’s central bank kept its benchmark loan prime rates (LPR) unchanged for the 11th consecutive month, signaling a cautious approach to monetary policy.
The one-year LPR remained at 3.00%, while the five-year rate held at 3.50%, both in line with market expectations and reflecting stable economic conditions.
Oil Prices and Inflation Concerns Limit Gains
Rising energy prices capped broader market gains, particularly for economies heavily reliant on oil imports.
Renewed geopolitical tensions contributed to a surge in oil prices following the closure of the Strait of Hormuz, reigniting concerns about inflation across the region.
Mixed Performance Across Other Markets
Elsewhere in Asia:
- Futures linked to India’s Nifty 50 index declined 1%
- Singapore’s Straits Times Index edged up 0.2%
- Australia’s S&P/ASX 200 remained largely unchanged
Overall, Asian markets continue to balance technology-driven optimism with geopolitical and inflation-related risks, keeping volatility elevated in the near term.
