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Asian Stocks Sink, Oil Rises on US-Iran Deadlock

From Asharq Al-Awsat · () English

Summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Context piece
  • Asian stocks declined as Middle East tensions drove oil prices up over two percent.
  • Negotiations between the US and Iran remain stalled, with sporadic attacks continuing in the region.
  • The AI boom is boosting some tech stocks, but concerns linger over the justification of high spending on AI data centers.

Most Asian markets experienced a downturn on Monday, mirroring global trends, as the ongoing deadlock in the Middle East sent oil prices soaring by more than two percent. The United States and Iran had agreed to a truce in April, but subsequent negotiations to end the conflict have faltered, punctuated by continued sporadic attacks in the region. US President Donald Trump issued a stern warning to Iran on Sunday, emphasizing the need for swift movement towards a peace deal.

there won't be anything left of them

· Donald TrumpUS President Donald Trump issued a fresh warning to Iran on Sunday, stating the consequences if they did not move quickly towards a peace deal.

The conflict has led to a de facto blockade of the Strait of Hormuz, a critical chokepoint for approximately 20 percent of global oil exports during peacetime. This strategic waterway remains effectively closed, a situation exacerbated by the lack of a breakthrough in the recent Trump-Xi summit regarding its reopening. Major stock exchanges in Tokyo and Hong Kong saw significant drops, while others like Sydney, Bangkok, and Singapore also fell, with Jakarta experiencing a substantial tumble.

remains meaningfully closed -- now approaching eleven weeks -- after the Trump-Xi summit in Beijing concluded without a breakthrough on reopening the waterway

· Michael WanMUFG's Michael Wan commented on the continued closure of the Strait of Hormuz and its connection to the stalled US-China trade talks.

Amidst the broader market decline, Seoul's stock market showed resilience, trading up due to the artificial intelligence stock boom. This AI-driven surge is particularly evident in companies like Kioxia, a leading NAND flash memory chip producer, which has seen its stock price skyrocket. The company forecasts substantial operating profits, attributing its success to the immense demand for AI data centers. Similarly, Samsung Electronics, another major beneficiary of the AI memory chip boom, is engaged in union talks to avert a strike.

Global government yields rose sharply heading into the start of this week, as three forces collided: surging oil prices, fading hopes for a Strait of Hormuz resolution, and mounting fiscal concerns especially in the UK and US

· Michael WanMUFG's Michael Wan explained the factors contributing to the sharp rise in global government yields.

Looking ahead, global government yields have risen sharply, influenced by the confluence of surging oil prices, diminishing hopes for a resolution in the Strait of Hormuz, and growing fiscal concerns in the UK and US. While recent trade talks between China and the United States offered some temporary relief to Asian markets, the upcoming G7 finance ministers' meeting and quarterly results from US chip giant Nvidia will be closely watched by investors assessing the justification for massive AI data center investments.

a degree of relief for Asian markets

· Michael WanMUFG's Michael Wan noted that recent trade talks between China and the United States provided some relief for Asian markets.
About this summary

Originally published by Asharq Al-Awsat. Summarized and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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