Asia Stocks Rise, Oil Drops, Iran Talks Progress – Asia Market Wrap

Asian equities advanced while oil prices declined as investors welcomed further signs of progress in diplomatic negotiations between the US and Iran, supporting risk sentiment despite lingering concerns over global growth.

A rally in technology shares helped lift the MSCI Asia Pacific Index 0.6%, with an Asian tech gauge surging more than 1.5% as enthusiasm surrounding the AI theme remained intact. Nasdaq 100 futures recovered from steeper losses to trade down 0.6%, while S&P 500 futures pared an earlier decline to fall 0.5%.

Brent crude dropped 1.7% to $79.20/bbl after the US and Iran agreed on a roadmap aimed at securing a final peace agreement within 60 days. The move extended the recent decline in oil prices as markets continued to unwind geopolitical risk premiums tied to supply disruptions through the Strait of Hormuz. Gold prices rebounded as investors balanced improving geopolitical conditions against ongoing macro uncertainty.

Chinese equities underperformed after reopening from a holiday. The Hang Seng China Enterprises Index fell more than 2%, pushing its decline from October highs to nearly 20%, while the MSCI China Index approached bear-market territory. Weak consumption data weighed on sentiment, reinforcing concerns about the strength of China’s economic recovery.

Bond yields moved higher across major markets as cash Treasury trading resumed following Friday’s US holiday. Yields on 10-year Treasuries, Japanese government bonds and Australian government bonds all advanced as investors continued to reassess the outlook for global interest rates after the Fed’s hawkish hold.

Attention now turns to this week’s US personal spending and inflation data, which could provide an early test of whether markets have correctly repriced for a more hawkish Fed path. Recent moves in rates markets suggest traders are increasingly questioning whether policy will need to remain restrictive for longer to contain inflation pressures.