On Monday (25 May, 9:50 AM, GMT+7, Bangkok time), major indices in the Asia Pacific increased, with Japan’s Nikkei surpassing the 65,000 mark for the first time, following a significant drop in oil prices linked to developments around the Strait of Hormuz. Investor optimism was bolstered after statements from U.S. officials indicated progress towards reaching an agreement with Iran that could lead to the reopening of the key energy passage.
President Donald Trump stated that negotiations with Iran were moving forward constructively, emphasizing that there was no urgency to conclude talks. His comments coincided with a decline in oil prices, which dropped by over 5%, reducing earlier gains that had followed the U.S. blockade of Iranian ports and Iran’s subsequent closure of the Strait of Hormuz.
U.S. officials reported over the weekend that negotiations with Iran to reopen the Strait were advancing, though both parties were still finalizing specific terms. According to reports, a memorandum of understanding has been drafted, extending the current ceasefire by 60 days while both sides negotiate a longer-term solution. However, Iranian state-run media Tasnim cautioned that unresolved disputes remain, particularly regarding Tehran’s demand for the unfreezing of its assets.
Trading volumes in Asia were lighter, with financial markets in Hong Kong and South Korea closed for a public holiday. Looking ahead, investors will be monitoring upcoming data releases, including U.S. Personal Consumption Expenditures and European inflation figures, for indications of inflation trends and interest rate direction.
Market pricing reflects expectations that the U.S. Federal Reserve, led by Chair Kevin Warsh, will implement an additional rate hike by the end of the year as inflation concerns persist.
Japan’s NIKKEI rose by 2.85% to 65,142.81, and Australia’s ASX 200 grew by 0.53% to 8,702.50.
As for stocks in China, Shanghai’s SSEC surged by 0.49% to 4,132.85, and Shenzhen’s SZI advanced by 0.76% to 15,715.30.
The U.S. stock markets edged up on Friday as the Dow Jones Industrial Average (DJIA) added 0.58% to 50,579.70. NASDAQ gained 0.19% to 26,343.97, and S&P 500 expanded by 0.37% to 7,473.47. VIX fell by 0.36% to 16.70.
As for commodities, oil prices settled higher on Friday as traders remained concerned about persistent tensions between the U.S. and Iran, raising doubts over the possibility of a peace accord. At the close, Brent crude increased to $103.54 per barrel, gaining 96 cents, or 0.94%. U.S. West Texas Intermediate settled at $96.60 per barrel, marking a 25-cent rise, or 0.26%.
Both benchmarks touched two-week lows on Monday amid tentative optimism that progress toward an agreement might be achieved, but uncertainty remains over some critical points. Brent futures slumped $4.77, or 4.61%, to $98.77 per barrel, and the WTI futures plummeted $4.60, or 4.76%, to $92.00 per barrel.
Meanwhile, gold futures climbed by 0.94% to $4,565.90 per Troy ounce.
