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Asian stock markets traded higher on Friday, following modest gains on Wall Street. The rise was supported by surging oil prices, which remained elevated due to ongoing uncertainty surrounding the Iran war and disruptions near the critical Strait of Hormuz. These disruptions continue to affect shipping activity.
Inflation Cools Despite Energy Pressures
In the United States, inflation eased to a four-year low of 1.4% in April, according to a key report. This offered some relief from persistent price pressures, although oil and gas prices are contributing to global inflation. US futures indicated a positive start for American markets.
Regional Market Performance
Tokyo's Nikkei 225 surged 2.7% to 63,352.44. South Korea's Kospi gained 0.6% to 7,860.59. Hong Kong's Hang Seng rose 1.2% to 25,685.65, and the Shanghai Composite climbed 0.5% to 4,096.24. Australia's S&P/ASX 200 increased by 0.5% to 8,664.00. Taiwan's Taiex was up 1.5%, and India's Sensex edged up 0.2%.
Oil Market Update
Brent crude, the international benchmark, climbed 1.5% to $104.08 a barrel. This is significantly higher than its February price of around $70 before the conflict escalated. US benchmark crude traded 0.9% higher at $97.25 a barrel. Analysts at ING noted that "uncertainty reigns" despite some optimism for a resolution.
US Markets and Corporate News
On Thursday, the S&P 500 gained 0.2% to 7,445.72, the Dow Jones Industrial Average rose 0.6% to 50,285.66, and the Nasdaq composite edged up 0.1% to 26,293.10. Nvidia shares dipped 1.8% despite strong quarterly earnings, with some analysts still viewing the stock as undervalued in the AI boom. Southwest Airlines and American Airlines saw gains before oil prices rebounded. Ralph Lauren surged 13.9% after reporting better-than-expected quarterly results.
Treasury Yields and Currency
The yield on the US 10-year Treasury note eased to 4.56% from over 4.67% earlier in the week, reflecting cooling inflation concerns. The US dollar strengthened against the Japanese yen, trading at 159.02, while the euro weakened slightly to $1.1613.