Asian stock markets posted further gains on Tuesday, extending a broad-based rally sparked by growing optimism that tensions in the Middle East are easing.
The positive sentiment followed reports that mediators have engaged with Iran, raising hopes for a diplomatic breakthrough between Tehran and the United States.
Japan’s Nikkei 225 index led the regional advance, maintaining its momentum from Monday’s session where it surged more than 5% to a new record high.
Japan’s Nikkei 225 index led the regional advance, maintaining its momentum from Monday’s session where it surged more than 5% to a new record high.
The sustained buying interest reflects investor confidence that a de-escalation could stabilize global supply chains and reduce geopolitical risk premiums across equity portfolios.
Energy markets also reacted to the diplomatic developments, with crude oil prices pulling back from one-month highs.
The retreat in oil underscores the market’s sensitivity to geopolitical risk; as the threat of supply disruptions in the Strait of Hormuz appears to diminish, the risk premium embedded in energy prices is unwinding.