Asian markets opened with robust gains, spearheaded by Japan’s Nikkei 225 hitting a record 65,000, as hopes for the reopening of the Strait of Hormuz pushed oil prices down over 5%. President Donald Trump’s comments on “constructive” Iran talks fueled investor optimism, outweighing thin trading volumes due to regional and U.S. holiday closures. This positive sentiment echoed Friday’s strong performance on Wall Street, with major U.S. indices also closing higher.
Asian markets kicked off the week with a notable rally, largely driven by a significant dip in oil prices and renewed optimism surrounding the potential reopening of the crucial Strait of Hormuz. Japan's benchmark Nikkei 225 index made history, soaring past the 65,000 mark for the first time ever in holiday-thinned trading sessions across the region.
The positive shift in sentiment followed an announcement from President Donald Trump via Truth Social, indicating that negotiations with Iran were proceeding in a "constructive and orderly manner." He emphasized patience, stating that "time is on [their] side" and instructing his representatives not to rush a deal. These comments quickly eased market anxieties that had escalated after the Trump administration's blockade on Iranian ports led to Tehran effectively closing the Strait of Hormuz, a vital energy chokepoint.
Pedestrians navigate a train station in Tokyo, Japan, on August 05, 2024.
Consequently, oil prices experienced a sharp decline of more than 5%. West Texas Intermediate (WTI) futures for July were down 5.87% at $90.93 per barrel, while Brent crude futures for July shed 5.58% to trade at $97.76 per barrel in early Asian trading.
Beyond Japan, other regional markets also saw significant gains. Taiwan's Taiex index achieved an all-time high, surging past 43,000 to close 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 climbed 1.09%.
Trading volumes were lighter than usual due to several public holidays. Markets in Hong Kong and South Korea were closed, and U.S. markets also remained shut on Monday in observance of Memorial Day. Despite the holiday, the positive momentum from Friday's U.S. trading session carried over, where the Dow Jones Industrial Average gained 294.04 points (0.58%) to a record close of 50,579.70. The S&P 500 rose 0.37% to 7,473.47, and the Nasdaq Composite climbed 0.19% to 26,343.97.
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