Announcements that U.S.-Iran negotiations are entering their final stages have driven a broad rally across Asian-Pacific stock markets on Thursday, with oil prices rebounding slightly after a sharp decline the previous day.
The U.S. President stated that talks with Iran are in the "final stages." This easing of geopolitical tensions led to a significant overnight drop in international oil prices, subsequently alleviating inflation risks associated with high oil costs. As a result, market expectations for a Federal Reserve rate hike before year-end have diminished.
Bolstered by this optimistic sentiment, Asian-Pacific equities followed the strong rebound of U.S. stocks overnight. Sovereign bond yields across many countries declined, although U.S. stock index futures weakened slightly, influenced by Nvidia's post-market decline and prevailing market caution. Key asset movements are as follows:
South Korea's KOSPI index surged approximately 6%, briefly triggering a market-wide circuit breaker. Japan's Nikkei 225 index extended gains to over 3%, with SoftBank Group Corp.'s stock soaring 20%.
U.S. S&P 500 index futures fell about 0.4%, and Nasdaq 100 futures declined 0.5%. This followed Nvidia's quarterly forecast, which, despite exceeding market expectations, failed to lift post-market sentiment.
Brent crude oil recovered slightly to around $105.60 per barrel, after plunging more than 5% on Wednesday.
Japan's 30-year government bond yield fell 8.5 basis points to 4.015%, while the 10-year yield also dropped 4 basis points to 2.745%.
The U.S. Dollar Index edged down 0.05%, holding above 99. The Australian dollar fell 0.25% against the U.S. dollar following the release of weak Australian employment data for April.
Spot gold rose 0.33% to $4,558 per ounce. Spot silver increased 0.71% to $76.36 per ounce.
South Korea led the gains, with the resolution of Samsung's labor dispute playing a significant role.
South Korea's KOSPI index was the standout performer in the Asia-Pacific region, with gains exceeding 6% at one point.
Samsung Electronics Co., Ltd. saw its stock surge up to 7% intraday. This followed a last-minute agreement between the company and its labor union, successfully averting a strike. This development served as a key catalyst for the South Korean market's rally.
Due to the excessive surge, the Korea Exchange activated a circuit breaker as the KOSPI 200 futures index rose 5%, halting program trading for five minutes.
The Japanese market also showed strong performance, with the Nikkei 225 index extending gains to over 3% and the TOPIX index rising 2%.
Reports citing informed sources indicate that OpenAI is preparing to file for an Initial Public Offering (IPO) in the coming weeks, aiming to complete the listing this autumn.
Buoyed by news of potential IPOs for OpenAI and SB Energy, SoftBank Group Corp.'s stock soared nearly 20% for the session.
Other Market Developments
The retreat in oil prices has eased inflation concerns, leading traders to scale back bets on a Federal Reserve rate hike this year. This has spurred a rebound in global sovereign bond prices from recent selling pressure.
Japan's 30-year government bond yield fell 8.5 basis points to 4.015%. Japan's 10-year government bond yield declined 4.0 basis points to 2.745%.
The U.S. Dollar Index edged down 0.05%, holding above 99.
The Australian dollar fell 0.25% against the U.S. dollar following the release of weak Australian employment data for April.
Traders slightly reduced their expectations for a Fed rate hike this year, although the prevailing view remains that the Fed's next policy move will be a rate increase.
A softer U.S. dollar contributed to a 0.33% rise in spot gold to $4,558 per ounce. Spot silver increased 0.71% to $76.36 per ounce.
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