Japan, South Korea markets hit records on hopes for winding down of Iran war

Hong Kong, May 29 (AP) Markets in Japan and South Korea hit fresh records as Asian shares advanced Friday on expectations the US and Iran will agree to extend the ceasefire in their war by 60 days.

Oil prices slipped, but remain above pre-war levels as the Strait of Hormuz remains largely closed. Analysts warned that the potential ceasefire extension should be viewed with caution, as it will take time for oil supplies to recover.

US futures edged higher.

Tokyo’s Nikkei 225 jumped 2.5 per cent and ended at a record high of 66,329.50, as data released Friday showed that Tokyo’s core inflation rate for May rose more slowly than economists expected.

South Korea’s Kospi surged 3.6 per cent to 8,476.15, also at an all-time closing high, with technology

companies powering the gains thanks to the global boom in artificial intelligence. Shares in Samsung Electronics, the country’s leading company, rose 5.8 per cent.

Hong Kong’s Hang Seng added 0.9 per cent to 25,222.38, while the Shanghai Composite index fell 0.9 per cent to 4,063.56.

Australia’s S&P 200 was up 1.6 per cent at 8,731.70.

Taiwan’s Taiex traded 2.5 per cent higher. India’s Sensex edged down 0.2 per cent.

On Thursday, negotiators from the US and Iran reached a tentative deal on extending their ceasefire and holding a new round of talks on Iran’s nuclear program, a US official said. Iran had not yet publicly confirmed the deal and the tentative agreement was still pending US President Donald Trump’s sign off.

Brent crude, the international standard, slipped 1.2 per cent early Friday to USD 91.57 a barrel. It was trading around USD 70 per barrel in late February before the war began. Benchmark US crude lost 1.5 per cent to USD 87.56 per barrel.

Investors are closely watching for a reopening of the Strait of Hormuz. The US official said the tentative accord makes it clear that Iran wouldn’t be able to impose tolls on ships transiting the strait, while the US would gradually lift its sea blockade on Iranian ports.

“The oil market continues to edge lower amid growing optimism that the US and Iran are moving toward a deal,” ING commodities strategists Warren Patterson and Ewa Manthey wrote Friday. “A reopening of the strait would offer some immediate relief to the oil market with tankers leaving the Persian Gulf. However, the recovery is still uncertain.” Shipowners may be reluctant to send vessels into the Persian Gulf, at least initially, over fears that the ceasefire could fail, they wrote. Also a recovery in oil and gas production would likely also be gradual rather than immediate.

On Thursday, Wall Street pushed to more records with the benchmark S&P 500 setting another all-time high, climbing 0.6 per cent to 7,563.63. The Dow Jones Industrial Average added less than 0.1 per cent to 50,668.97, and the technology-heavy Nasdaq composite gained 0.9 per cent to 26,917.47.

Shares of discount retail chain Dollar Tree surged 17.9 per cent after it reported stronger-than-expected profit, while department store retailer Kohl’s jumped 20.6 per cent, also after better-than-anticipated results.

In other dealings early Friday, the US dollar was unchanged at 159.24 Japanese yen. The euro flatlined at USD 1.1651. (AP) FHK GRS GRS