Asian markets experienced a robust rally, driven by Wall Street’s overnight gains and a signal of de-escalation in the Middle East as President Trump announced a pause in “Project Freedom.” South Korea’s Kospi led the charge, soaring past 7,000 to a new record, fueled by strong performances from tech giants like Samsung Electronics and SK Hynix. Oil prices also saw a decline, further boosting investor sentiment across the region.
Asia-Pacific markets experienced a broad and robust rally, mirroring Wall Street's strong overnight performance, as investor sentiment was buoyed by declining oil prices and promising earnings reports. South Korea's Kospi index was a standout performer, soaring to another all-time high.
Key to the optimistic mood were signals of de-escalation in the Middle East. U.S. President Donald Trump announced a temporary halt to 'Project Freedom,' the U.S. initiative to guide commercial ships through the Strait of Hormuz, indicating that diplomatic efforts to finalize an agreement were underway.
"We have mutually agreed that, while the Blockade will remain in full force and effect, Project Freedom will be paused for a short period of time to see whether or not the Agreement can be finalized and signed," Trump stated in a post on Truth Social.
Prior to this announcement, U.S. Defense Secretary Pete Hegseth had confirmed that two U.S. commercial ships, escorted by American destroyers, had successfully navigated the strait, signaling a clear passage.
In response to the easing tensions, oil prices extended their decline. West Texas Intermediate futures for June were down 1.78% to $100.45 per barrel, while Brent crude futures for July fell 1.70% to $108.00 per barrel.
South Korea's Kospi index jumped an impressive 6.68%, pushing past the 7,000-point mark to establish a new peak. This adds to the index's more than 70% gains recorded year-to-date, following its return to trading after a holiday. Major contributors to this surge included Samsung Electronics, which reached a record high with a gain of over 15% and crossed the $1 trillion market-cap threshold, and SK Hynix, which also hit an all-time high, climbing more than 10%. In contrast, the small-cap Kosdaq index saw a modest dip of 0.88%.
Elsewhere in Asia, China's CSI 300 index advanced 1.62% as markets reopened after the Labor Day break. Hong Kong's Hang Seng index gained 0.62%, with its tech counterpart, the Hang Seng Tech index, rising 1.05%.
India's Nifty 50 was up by 0.72%, and Australia's S&P/ASX 200 increased by 0.87%. Japan's stock market remained closed due to a national holiday, while the Japanese yen strengthened by over 1% against the U.S. dollar, trading at 156.15.
Futures for U.S. markets also indicated positive momentum, with S&P 500 futures adding 0.2% and Nasdaq 100 futures climbing 0.6%. Futures tied to the Dow Jones Industrial Average saw a marginal dip of less than 0.1%.
During the prior Tuesday's trading session, the S&P 500 closed at a new record high of 7,259.22, up 0.81%. The Nasdaq Composite also achieved a new closing record of 25,326.13, gaining 1.03%. The Dow Jones Industrial Average added 356.35 points, or 0.73%, to finish at 49,298.25.
