Gotrade News - Middle East tensions whipsawed Asia markets Tuesday as fresh US strikes on Iran rattled trader sentiment. South Korea's KOSPI surged 2.78% to a record 8,131.15, while oil prices diverged sharply.
Investors sought refuge in resilient tech names while energy traders struggled to price the conflict. Defense and oil equities globally remain in focus as Doha peace talks continue.
Key Takeaways
- KOSPI hit a record 8,131.15 on a 2.78% surge led by Samsung and SK Hynix.
- Brent crude jumped 2.01% toward $98 while WTI fell 4.98% near $92.
- Sri Lanka's central bank shocked markets with a 100 bps rate hike Tuesday.
Asia Markets Split On Geopolitical Risk
South Korean tech led regional gains as Samsung Electronics added 2.56% and SK Hynix surged 6.80%. Hong Kong's Hang Seng rose 0.5%, with Hua Hong Semi up 7.84%.
However, Japan's Nikkei 225 slipped 0.26% to 64,994.4, and the TOPIX edged down 0.13%. Mainland China weakened, with the Shanghai Composite off 0.8% and CSI 300 down 0.49%.
Australia's ASX 200 fell 0.34% while Singapore's Straits Times dropped 0.45%. India's Nifty 50 held flat, eking out a 0.07% gain on cautious trade.
According to Investing.com, sentiment stayed fragile despite Wall Street's pre-Memorial Day gains. Traders weighed fresh US military action against ongoing Doha negotiations.
Oil Splits As Strikes Curb Peace Hopes
Brent crude climbed 2.01% toward $98 per barrel on tightening supply fears across the Strait of Hormuz. WTI tumbled 4.98% to near $92, reflecting a sharp transatlantic dislocation.
The divergence reflects positioning differences and regional supply exposure to any Iranian retaliation. Defense names such as Lockheed Martin (LMT) and Raytheon Technologies (RTX) remain in focus.
President Trump said talks were "proceeding nicely" even as new strikes hit Iranian targets. The mixed signaling left traders unable to settle on a clear directional bias.
Energy majors like Exxon Mobil (XOM) face two-way risk from price volatility. Refining margins could compress further if the Brent-WTI spread widens beyond historical norms.
As reported by Investing.com, technology shares outperformed amid the broader risk-off backdrop. Investors are rotating toward semiconductor names viewed as relatively insulated from energy shocks.
Per market commentary, Chinese chipmaker SMIC jumped 6.32% on continued domestic demand. The rally suggests selective risk appetite despite headline geopolitical anxiety.
Sri Lanka Surprises With Bigger Rate Hike
The Central Bank of Sri Lanka raised its overnight policy rate 100 bps to 8.75%. Consensus had expected just a 25 bps move at the Tuesday meeting.
According to Investing.com, the CBSL cited elevated inflation and a weakening rupee. Officials blamed the "U.S.-Israel war with Iran" for the energy-driven shock.
Headline inflation jumped to 5.4% last month from 2.2% in March. The rupee has weakened roughly 9% since early March, pressuring import-dependent consumers.
Sri Lanka relies entirely on imported fuel and recently raised government fuel prices 40%. Rationing has resumed, complicating an ongoing $2.9 billion IMF program and shrinking reserves.
