Tokyo's benchmark Nikkei 225 index made history on Monday, breaching the 65,000 mark for the first time ever and hitting a fresh record high. This significant surge occurred during holiday-thinned trading across Asia, fueled by investor optimism following reports that the critical Strait of Hormuz could soon reopen, leading to a sharp decline in global oil prices.
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Pedestrians walk through a train station on August 05, 2024 in Tokyo, Japan.
Tomohiro Ohsumi | Getty Images News | Getty Images
U.S. President Donald Trump shared via Truth Social that negotiations with Iran were progressing in an "orderly and constructive manner." He also indicated that his representatives were advised "not to rush into a deal," suggesting time was on their side. These comments sparked a more than 5% drop in oil prices, alleviating significant pressure on global markets.
Prior to this development, oil prices had escalated sharply after the Trump administration imposed a blockade on Iranian ports, which effectively led Tehran to close the Strait of Hormuz, a vital artery for global energy shipments.
In early Asian trading, West Texas Intermediate (WTI) futures for July delivery plummeted 5.87% to $90.93 per barrel, while Brent crude futures for July saw a 5.58% decrease, settling at $97.76 per barrel.
Beyond Japan, other Asian markets also experienced upward momentum. Japan's Nikkei 225 surged over 3% to reach an unprecedented 65,408.87, with the broader Topix index gaining 1.19%. Taiwan's Taiex also hit an all-time high, climbing past 43,000 to stand 2.91% higher at 43,495.92.
Australia's S&P/ASX 200 advanced 0.45%, China's CSI 300 added 0.91%, and India's Nifty 50 rose 1.09%. However, trading volumes were notably light as markets in Hong Kong and South Korea observed public holidays. U.S. markets were also closed for Memorial Day.
Looking back at Friday's session, the Dow Jones Industrial Average closed up 294.04 points (0.58%) at 50,579.70, setting a new intraday and closing record. The S&P 500 increased by 0.37% to 7,473.47, and the Nasdaq Composite saw a 0.19% climb, finishing at 26,343.97.
— This report was contributed to by CNBC's Spencer Kimball, Liz Napolitano, and Yun Li.
