Most Asian stock markets traded higher on Tuesday, with Japan’s benchmark Nikkei 225 briefly crossing the 70,000 mark for the first time before giving up some of its early gains following a rate hike by the Bank of Japan (BOJ).
The BOJ raised its key interest rate by 0.25 percentage points to 1%, taking the benchmark rate to its highest level in nearly 30 years.
By early afternoon, Japan’s Nikkei 225 was up 0.6% at 69,713.05. South Korea’s Kospi continued its record-setting run, gaining 2.1% to 8,721.64.
China’s Shanghai Composite edged up less than 0.1% to 4,100.53. However, Australia’s S&P/ASX 200 fell 0.3% to 8,892.10, while Hong Kong’s Hang Seng dropped 1.3% to 24,533.35.
Taiwan’s Taiex rose 0.6%, and India’s Sensex added 0.5%.
Global markets rallied on Monday after the United States and Iran reached a preliminary agreement aimed at restoring the smooth flow of oil supplies. The development helped ease concerns over disruptions in global energy markets.
On Wall Street, the S&P 500 climbed 1.7%, while the Dow Jones Industrial Average gained 0.9% to reach a record high. The technology-heavy Nasdaq surged 3.1%.
Oil prices also declined after the announcement, as investors hoped the deal could lead to the reopening of the Strait of Hormuz, a key route for global oil shipments and a major source of energy supplies for Asia.
Brent crude oil dropped 4.8% on Monday, although analysts cautioned that uncertainty remains and negotiations between Washington and Tehran are expected to continue over the next two months. They also noted that even if the strait reopens as expected, it could take several months before energy exports return to normal levels.
Oil prices have fallen from above $100 per barrel seen a few weeks ago during heightened tensions. Before the conflict, crude was trading near $70 a barrel.
Early Tuesday, US benchmark crude oil slipped 9 cents to $80.66 per barrel, while Brent crude, the international benchmark, fell 24 cents to $82.93 per barrel.
Technology shares led gains on Wall Street, particularly companies linked to artificial intelligence (AI). Micron Technology jumped 10.8%, while Advanced Micro Devices (AMD) rose 7%.
Nvidia, the world’s most valuable publicly traded company, gained 3.5%, providing the biggest boost to the S&P 500. Meanwhile, SpaceX, the rocket company owned by Elon Musk and parent of AI firm xAI, surged 19.6% in its second day of trading on Wall Street.
In the bond market, US Treasury yields edged lower as falling oil prices reduced concerns that central banks may need to keep raising interest rates. The yield on the 10-year Treasury note slipped to 4.47% from 4.48% on Friday.
In currency trading, the US dollar was little changed at 160.33 Japanese yen. The euro traded at $1.1580, slightly lower than $1.1592 in the previous session.