Asian stocks trade higher on US-Iran peace deal, Nikkei 225 leads with record high

Asian stocks rise sharply on Thursday.
Hopes that the US and Iran will conclude the conflict and reopen the Strait of Hormuz improve risk sentiments.
The Nikkei 225 is the best performer for the day, rising over 5.70% to a record high.

Lallalit Srijandorn FXStreet

Most Asian equities trade in positive territory on Thursday amid optimism over a possible deal to end the war between the United States (US) and Iran.

An Iranian official said on Wednesday that it was reviewing a US peace proposal that sources said would formally end the war while leaving unresolved the critical US demands that Iran suspend its nuclear program and reopen the Strait of Hormuz. Iran is expected to hand over its reply on Thursday to mediators about the US proposal to end the war.

Earlier on Wednesday, US President Donald Trump stated that the US has had “very good talks” with Iran over the past 24 hours.

“We remain on the path towards de-escalation, and towards an end to the conflict,” said Michael Brown, a strategist at Pepperstone in London. “While that path is clearly a rough one, so long as we remain on it, and the direction of travel remains a more optimistic one, then risk appetite should remain underpinned.”

The Nikkei 225, Japan’s benchmark, surged over 5.70% to a fresh record high of around 62,915 earlier on Thursday and currently trades near 62,825. The Japanese Yen (JPY) remains in focus after rallying on Wednesday amid suspected speculation that officials are intervening in the market.

Japan’s top foreign exchange official, Atsushi Mimura, stated on Thursday that he will closely monitor the foreign exchange (FX) markets. Mimura also declined to comment on FX intervention and specific currency levels.

China and Hong Kong stock markets gain momentum on Thursday, with the SHANGHAI, China’s main stock market index, increasing by 0.25% to 4,170. The Hong Kong Stock Exchange jumps by 1.55% to 26,625.

Meanwhile, the South Korean stock, the benchmark KOSPI, rises by 0.22% to 7,405. The index extends the rally after hitting a series of record highs on gains in chipmakers.

India’s Nifty50 was down 0.02% to trade at 24,325 on Thursday. In Taiwan, the Taiex climbs by 2.00% to 41,970. Other markets in Southeast Asia trade higher.

Asian stocks FAQs

Which are the main stock market indices in Asia?

Asia contributes around 70% of global economic growth and hosts several key stock market indices. Among the region’s developed economies, the Japanese Nikkei – which represents 225 companies on the Tokyo stock exchange – and the South Korean Kospi stand out. China has three important indices: the Hong Kong Hang Seng, the Shanghai Composite and the Shenzhen Composite. As a big emerging economy, Indian equities are also catching the attention of investors, who increasingly invest in companies in the Sensex and Nifty indices.

What are the main sectors represented in Asian stock markets?

Asia’s main economies are different, and each has specific sectors to pay attention to. Technology companies dominate in indices in Japan, South Korea, and increasingly, China. Financial services are leading stock markets such as Hong Kong or Singapore, considered key hubs for the sector. Manufacturing is also big in China and Japan, with a strong focus on automobile production or electronics. The growing middle class in countries like China and India is also giving more and more prominence to companies focused on retail and e-commerce.

What factors drive Asian stock markets?

Many different factors drive Asian stock market indices, but the main factor behind their performance is the aggregate results of the component companies revealed in their quarterly and annual earnings reports. The economic fundamentals of each country, as well as their central bank decisions or their government’s fiscal policies, are also important factors. More broadly, political stability, technological progress or the rule of law can also impact equity markets. The performance of US equity indices is also a factor as, more often than not, Asian markets take the lead from Wall Street stocks overnight. Finally, the broader risk sentiment in markets also plays a role as equities are considered a risky investment compared to other investment options such as fixed-income securities.

What are the risks of investing in Asia stock markets?

Investing in equities is risky by itself, but investing in Asian stocks comes along with region-specific risks to be taken into account. Asian countries have a wide range of political systems, from full democracies to dictatorships, so their political stability, transparency, rule of law or corporate governance requirements may diverge considerably. Geopolitical events such as trade disputes or territorial conflicts can lead to volatility in stock markets, as can natural disasters. Moreover, currency fluctuations can also have an impact on the valuation of Asian stock markets. This is particularly true in export-oriented economies, which tend to suffer from a stronger currency and benefit from a weaker one as their products become cheaper abroad.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

AUD/USD sits near a one-month top, above 0.7000 amid fresh USD selling

AUD/USD holds above 0.7000 through the Asian session, trading near a one-month high touched earlier this Monday amid renewed US Dollar selling. US bond yields decline further amid a modest pullback in crude oil prices, capping the USD recovery from a three-week low. Moreover, bets for a November RBA rate hike support the Aussie, though upside seems capped ahead of the crucial two-day FOMC meeting, starting Tuesday.

USD/JPY struggles below 157.00 on weak USD; holds above one-month low ahead of Fed, BoJ meetings

USD/JPY attracts fresh sellers during the Asian session on Monday, stalling its recovery from the lowest level since September 18, touched Friday as a further decline in US bond yields weighs on the US Dollar. Meanwhile, the Japanese Yen benefits from a more hawkish BoJ, further weighing on the currency pair. The downside, however, seems limited as traders keenly await Fed and BoJ policy meetings later this week.

Gold sticks to modest recovery gains above $4,000 as Fed hike bets cap upside

Gold stages a modest recovery from the vicinity of a three-month low, trading above the $4,000 psychological mark through Monday’s Asian session amid a softer US Dollar. US President Donald Trump has ruled out immediate military action against Iran, triggering a modest pullback in crude oil prices. Furthermore, Federal Reserve officials have signaled no urgency to raise interest rates immediately.

Cardano's derivatives and on-chain data confirm bears in control

Cardano extends losses, trading below $0.202 after three consecutive weeks of more than 20% declines since early October. Selling pressure continues to build as weakening derivatives metrics, bearish on-chain signals and a deteriorating technical outlook point to further downside risks. Derivatives data shows a bearish bias for Cardano.

Flight to safety meets a high earnings bar as central bank week begins

Treasuries rallied again, equities are struggling, and central banks and earnings are on the horizon. Last week, US Treasuries rallied for a second consecutive week. This pushed 10s and 30s to 5% and 5.33%, respectively, flattening the curve even as Brent crude rallied about 7% to within striking distance of March peaks at US$119.50, and tech stocks posted a second straight week of losses.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.