Asia Markets Rally on Iran Peace Hopes Despite Fresh U.S. Strikes

CNBC reported Tuesday that South Korea’s Kospi hit a record high as Asia markets reopened with cautious optimism over U.S.-Iran peace negotiations.

Kospi Leads Asia on Renewed Iran Optimism

South Korea’s benchmark index climbed 2.55% to 8,047.51, touching an intraday peak of 8,131.15. The move came after President Donald Trump said talks with Tehran were progressing well, though he cautioned that military action could resume if diplomacy collapsed. The small-cap Kosdaq also closed higher, gaining just under 1%.

U.S. Central Command confirmed it carried out what it called self-defense strikes against Iranian missile sites and vessels allegedly attempting to lay mines. The strikes underscored the fragility of ongoing negotiations. Former CIA Director David Petraeus, speaking at the UBS Asian Investment Conference, suggested Iran appeared to be softening its position on the Strait of Hormuz closure.

Oil Prices Stay Volatile but Below $100

Crude markets reflected the uncertain backdrop. Brent futures for July rose nearly 2.8% to just under $99 per barrel, while West Texas Intermediate dropped sharply, falling more than 4% to around $92 per barrel. There was no WTI settlement Monday due to the U.S. Memorial Day holiday. The divergence between benchmarks signals traders remain divided on whether a Hormuz reopening deal will hold.

Background: Japan and Regional Context

Japan’s Nikkei 225 gave back modest gains on Tuesday, slipping 0.25% to close just below the 65,000 level. The index had crossed that threshold for the first time Monday during a thinly traded session. The Bank of Japan’s Deputy Governor Ryozo Himino indicated the central bank has not yet determined the timing of its next rate increase, noting ongoing attention to Middle East developments.

Australia’s ASX 200 slipped 0.4%, while China’s CSI 300 edged higher. Hong Kong’s Hang Seng was effectively flat after returning from a public holiday. Indian benchmarks including the Nifty 50 and BSE Sensex both posted small declines.

U.S. Futures Point Higher After Holiday Break

With Wall Street returning from the Memorial Day break, U.S. futures opened positively. S&P 500 futures advanced roughly 0.8%, Nasdaq-100 futures gained more than 1%, and Dow Jones futures added around 370 points. Whether the optimism holds will likely depend on any further signals from Washington or Tehran before the opening bell.

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