New Delhi: Asian markets struggled on Friday while oil prices climbed again, as uncertainty over a fragile Middle East ceasefire and stalled U.S.–Iran negotiations dampened investor sentiment.
MSCI Asia-Pacific Index excluding Japan edged up 0.3%, heading for a weekly gain of 0.8%. Japan’s Nikkei added 0.45%, while markets in South Korea, China, and Hong Kong closed lower.
Nasdaq futures NQc1 and S&P 500 futures advanced 0.6% and 0.1%, respectively, after closing lower in the cash session overnight, while EUROSTOXX 50 futures STXEc1 were down 0.65% and FTSE futures fell 0.9%.
The mixed performance reflected ongoing market anxiety, with investors oscillating between hopes for de-escalation and fears that tensions could persist.
“The thing is, a ceasefire is a funny term to use in conjunction with a blockade and rolling tensions and animosities,” said Vishnu Varathan, Mizuho’s head of macro strategy for APAC.
President Donald Trump said he had ordered the Navy to “shoot and kill” Iranian boats laying mines in the strait, and step up demining activity. Iran had earlier signalled its control over the route by releasing footage of commandos boarding a cargo vessel.
Trump’s remarks followed his earlier decision to indefinitely extend a two-week ceasefire with Iran to allow more time for negotiations.
“It’s not going to be a linear de-escalation of violence and oil prices and volatility around the entire supply shock,” said Varathan. “(Investors) have just been looking for excuses to put on optimistic trades opportunistically. I don’t think anybody in the market truly believes that this will be over in a week or two.”
Oil prices surged amid concerns over supply disruptions linked to the Hormuz standoff.
Brent crude futures LCOc1 rose over 1% to $106.21 per barrel, while U.S. crude CLc1 gained 1% to $96.77 per barrel.
Markets showed limited reaction to news that Lebanon and Israel had agreed to extend their ceasefire by three weeks following talks in Washington, indicating that investors remain focused on broader geopolitical risks and energy market disruptions.
Yen On The Cusp Of 160
Currency markets were relatively subdued on Friday, though the U.S. dollar remained on track for a weekly gain amid renewed safe-haven demand.
The euro EUR= last bought $1.1684 and was set to lose nearly 0.7% for the week, while sterling GBP= was little changed at $1.3469 and headed for a slight weekly decline.
Attention is turning to a series of key central bank meetings next week, including the U.S. Federal Reserve, the European Central Bank and the Bank of England, which are due to announce their policy decisions. Investors are closely watching how policymakers assess the impact of ongoing geopolitical tensions on inflation and economic growth.
“In view of the demand destruction implied by higher energy prices, there may be an understandable reluctance by many G10 policymakers to push ahead with rate hikes over the coming months,” said Jane Foley, head of FX strategy at Rabobank.
The Bank of Japan (BOJ) is also set to meet next week, with expectations that it will keep interest rates unchanged.
In currency markets, the Japanese yen remained in focus, trading just below the key 160-per-dollar level—widely viewed as a potential trigger for government intervention. The yen was last at 159.78 per dollar, marking a weekly decline of about 0.7%.
Japan’s Finance Minister Satsuki Katayama reiterated warnings of possible currency intervention, emphasising the need for “decisive action” in coordination with the United States.
“Lower market liquidity during Golden Week, which comes directly after the BOJ meeting, may provide an opportunity for FX intervention and a knee-jerk appreciation in the yen within the 150–160 range,” said Carl Ang, fixed income research analyst at MFS Investment Management.
Markets will be closed on a number of days over the annual Golden Week holiday, which lasts into early May.
Meanwhile, spot gold XAU= was flat at $4,691.60 an ounce.
(DD News)