- Primary US benchmark West Texas Intermediate shaves below $88 a barrel.
- Tokyo, Seoul and Taipei stock exchanges surge by more than 2 per cent.
- Hong Kong’s gains more muted, while Shanghai’s main benchmark loses 0.4%.
HONG KONG: Asian stock markets surged and oil prices receded on Friday, boosted by optimism that the United States and Iran will reach a deal to end their war that has hobbled global energy supplies.
During Friday morning trading in Asia, the price of Brent crude was down 0.9% to around $93 a barrel, while primary US benchmark West Texas Intermediate shaved 1.1% to just below $88 a barrel.
Leading indices on stock exchanges in Tokyo, Seoul and Taipei surged by more than 2%, while Sydney was up by 1%.
Hong Kong’s gains were more muted, while Shanghai’s main benchmark had lost 0.4%.
Wall Street’s advances on Thursday came despite several gloomy indicators, with the Federal Reserve’s preferred inflation gauge rising in April to its highest since 2023 and first-quarter economic growth being revised lower.
The combination of persistent inflation and slowing growth lowers the chances of interest rate cuts by the Fed, despite Trump’s repeated calls for lower rates to boost the economy.
Still, “recession risks are easing as oil prices moderate and the probability of worst-case scenarios fades”, wrote Matthew Martin of Oxford Economics.
“While reduced risks from the war have helped, the improvement in equity prices is mostly because of a robust earnings season. The driver is overwhelmingly AI-related capital expenditure,” he said.
Global AI bullishness has driven a historic rally, this week pushing the market capitalisations of chipmakers Micron and SK hynix across the $1 trillion threshold.
In Europe, observers are awaiting a key gathering of leaders on Friday to discuss ways to address gaping trade deficits with China.
European Union commissioners will hold a debate on what the 27-nation bloc should do to defend the continent’s companies from what Brussels describes as unfair competition from Chinese rivals.
