On a Monday that carried the weight of a war now three months old, the markets of Tokyo and Seoul reached new summits, lifted by a faith in artificial intelligence that seems to outrun the troubles of the wider world. Yet the gains rest on uncertain ground: oil climbed back toward ninety dollars a barrel as the Strait of Hormuz remains largely shut and negotiators in Washington and Tehran have not settled whether the fragile ceasefire will be extended. Investors, like travelers at a crossroads, are betting that the passage will reopen sooner rather than later, and their wager will shape the pr
Japan and South Korea Stocks Hit Records as Oil Climbs on Iran War Ceasefire Uncertainty
Records on the screens, a largely closed strait on the map
Mark
Stocks at records while a war is still on. Why does that hold together?
Mimi
Because the two stories are running on different engines. The records in Tokyo and Seoul are about AI and chips. South Korea's exports rose 53 per cent in May on semiconductor demand, and Dell raised its outlook on AI orders.
Mark
But oil is up too, so the war is showing up somewhere.
Mimi
Yes. Brent is at $94.16 against roughly $70 in late February. That's the war's price tag in one number.
Luke
Worth being careful there. The article ties oil's jump to the talks and the drone incident, but it doesn't say how much of the move each factor explains.
Mark
Goltermann says markets assume Hormuz reopens soon. Is that confirmed?
Mimi
It's his read of investor behavior, not a fact about what will happen. The strait is still largely closed and the US blockade of Iranian ports continues.
Luke
Right, it's one economist's characterization. And the 60-day extension is only a tentative plan. Trump hadn't decided, and Iran said nothing was finalised.
Mark
Any sign the optimism isn't universal?
Mimi
Shanghai fell 0.3 per cent after weak May factory data, and India's Sensex lost 0.7 per cent. Europe was barely moving.
Luke
And the article doesn't say why India fell, so I wouldn't read a cause into it.
Il Polso
- Japan's Nikkei 225 and South Korea's Kospi closed at record highs, with SoftBank and Samsung surging on AI demand.
- Brent crude jumped 3.3% to $94.16, far above its roughly $70 level before the Iran war began.
- The Strait of Hormuz stays largely closed, and a US sea blockade on Iranian ports deepens the standoff.
- A decision on extending the 60-day Iran ceasefire and reopening the strait hangs over oil prices and equity markets alike.
On a Monday that carried the weight of a war now three months old, the markets of Tokyo and Seoul reached new summits, lifted by a faith in artificial intelligence that seems to outrun the troubles of the wider world. Yet the gains rest on uncertain ground: oil climbed back toward ninety dollars a barrel as the Strait of Hormuz remains largely shut and negotiators in Washington and Tehran have not settled whether the fragile ceasefire will be extended. Investors, like travelers at a crossroads, are betting that the passage will reopen sooner rather than later, and their wager will shape the price of energy and the mood of the coming weeks.
On Monday, Tokyo's Nikkei 225 closed at a record 66,934.33, and South Korea's Kospi finished at 8,788.38, its own peak. Both rallies were driven by technology stocks, as investors kept wagering on artificial intelligence. SoftBank Group soared 14 per cent and overtook Toyota as Japan's most valuable listed company, while Samsung Electronics, South Korea's largest firm, rose more than 10 per cent. South Korean exports had jumped 53 per cent in May, carried by global demand for semiconductors.
The wider region told a more mixed story. Shanghai slipped after weak factory data from China, and Hong Kong and Taiwan edged higher. In Europe, the FTSE, CAC and DAX traded close to flat.
Behind the glittering numbers lies a war now three months old. Oil rose more than 3 per cent as US and Iranian negotiators continued to discuss reopening the Strait of Hormuz, a vital artery for global oil and gas. Brent crude reached $94.16, up from about $70 before the conflict began. The US military reported strikes on Iranian sites after Tehran downed an American drone, and Israel's advance in Lebanon against Hezbollah added further complication.
The diplomatic path remains unsettled. President Trump had not decided whether to extend the ceasefire by 60 days, and Iran said no deal was final. Still, economists such as Capital Economics' Jonas Goltermann observed that markets continue to assume the strait will reopen eventually. The next signal, whether the ceasefire is extended and the passage reopened, will determine where oil and, to a degree, equities go from here.
On Monday, Tokyo's Nikkei 225 closed at 66,934.33, an all-time high, after crossing the 67,000 mark for the first time earlier in the session and touching 67,231.28. Across the water, South Korea's Kospi jumped 3.7 per cent to finish at a record 8,788.38, having reached an intraday peak of 8,874.16. Both rallies were led by technology stocks, as investors kept betting on growth in artificial intelligence and other advanced technologies.
The individual moves were large. Shares of SoftBank Group, the investment company with a heavy focus on AI, soared 14 per cent and made it Japan's most valuable listed company, passing Toyota. In South Korea, Samsung Electronics, the country's biggest company, rose 10.1 per cent. Official data released Monday showed South Korean exports up 53 per cent year-on-year in May, helped by global demand for semiconductors. Over the past month the Nikkei has gained more than 12 per cent, while the Kospi has surged around 27 per cent.
Elsewhere in Asia the picture was mixed. Hong Kong's Hang Seng traded 0.9 per cent higher at 25,398.18, and Taiwan's Taiex climbed 1.4 per cent. The Shanghai Composite slipped 0.3 per cent to 4,057.74 after China reported over the weekend that May factory activity softened, with signs of weaker new export demand. Australia's S&P/ASX 200 edged down less than 0.1 per cent to 8,729.40, and India's Sensex lost 0.7 per cent. In early European trading, Britain's FTSE 100 was down 0.1 per cent at 10,396.16, France's CAC 40 rose 0.2 per cent to 8,202.53, and Germany's DAX gained 0.4 per cent to 25,198.34.
Behind the rally sits a war that is now three months old. Oil prices rose more than 3 per cent as US-Iran negotiations continued, including talks on reopening the Strait of Hormuz, a key route for global oil and natural gas. Brent crude, the international benchmark, rose 3.3 per cent early Monday to $94.16 a barrel; it was around $70 in late February, before the war began. Benchmark US crude was up 3.9 per cent at $90.78. The US military said Monday that it bombed Iranian military sites after Tehran shot down an American drone.
The diplomatic track remains unsettled. On Friday, President Donald Trump met advisers in high-level talks but had not decided on a tentative plan to extend the ceasefire by 60 days, while Iran said a deal was not finalised. The strait has been largely closed, and the US has imposed a sea blockade on Iranian ports. Meanwhile the Israeli army was advancing in Lebanon in its campaign against the Iran-backed Hezbollah, which further complicates any deal.
Jonas Goltermann, chief markets economist at Capital Economics, wrote that despite another round of tit-for-tat attacks, market participants continue to assume that the Strait of Hormuz will reopen sooner rather than later.
Wall Street set the tone on Friday. The S&P 500 added 0.2 per cent to 7,580.06, its seventh straight gain, while the Dow rose 0.7 per cent to 51,032.46 and the Nasdaq composite gained 0.2 per cent to 26,972.62. Dell Technologies surged 32.8 per cent after results beat expectations and it raised its outlook on strong AI-related demand; Microsoft rose over 5.4 per cent and Broadcom 4.7 per cent. In currencies, the dollar rose to 159.47 yen from 159.25, and the euro slipped to $1.1650 from $1.1667.
The next marker is the decision on whether to extend the ceasefire by 60 days, and whether the strait reopens. Oil and, to a degree, equities are tracking both.
Citazioni salienti
Despite another round of tit-for-tat attacks, market participants continue to assume the Strait of Hormuz will reopen sooner rather than later.— Jonas Goltermann, chief markets economist, Capital Economics
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