Asian Markets Rise Amid Ceasefire Talks Between U.S. and Iran

Asian stock markets experienced gains on Thursday, with oil prices stabilizing, as investors closely monitored the progress of ceasefire negotiations between the United States and Iran.

Tokyo's Nikkei 225 closed 2.4% higher at 59,518.34, reaching an all-time high and recovering from earlier losses since the onset of the Iran conflict. South Korea's Kospi climbed 2.2% to 6,226.05. Hong Kong's Hang Seng rose 1.7% to 26,398.54, while the Shanghai Composite index increased by 0.7% to 4,055.55. China reported a 5% economic growth for the January-March quarter, an acceleration from the previous quarter. Economists note that while China has largely mitigated the initial impacts of the Iran conflict, its export sector could face challenges in the coming months due to slower global economic growth.

Taiwan's Taiex traded 1.1% higher, with shares of chipmaker TSMC up 0.2% ahead of its earnings announcement, which revealed a 58% jump in profit, surpassing analysts' expectations. Australia's S&P/ASX 200, however, lost 0.3%.

On Wednesday, regional officials indicated that the U.S. and Iran had reached an "in-principle agreement" to extend a two-week ceasefire set to expire next week and were progressing toward another round of talks. However, U.S. Treasury Secretary Scott Bessent warned that Washington was preparing to apply secondary sanctions on entities conducting business with Iran, including potential measures against Chinese firms purchasing Iranian oil, to intensify economic pressure on Tehran.

Oil prices gained early Thursday. Brent crude, the international standard, was up 1.6% to $96.44 per barrel, while benchmark U.S. crude increased by 1.4% to $92.58 a barrel. Oil prices have surged since the Iran conflict began in late February. The Strait of Hormuz, a crucial waterway through which approximately a fifth of the world's oil passes, has remained largely closed. The U.S. imposed a naval blockade on Iranian ports this week to compel Tehran to reopen the strait and accept a deal.

"The key upside risk for the market is that peace talks between the U.S. and Iran break down," ING Bank strategists Warren Patterson and Ewa Manthey wrote in a note Thursday. "This isn't an unrealistic scenario, given that U.S. and Iranian demands remain fairly wide apart."

On Wednesday, Wall Street reached a record high on optimism over progress toward a longer-term ceasefire in the Iran conflict. The benchmark S&P 500 rose 0.8% to 7,022.95, surpassing its prior all-time high set in January. The Nasdaq composite gained 1.6% to 24,016.02, while the Dow Jones Industrial Average edged down 0.2% to 48,463.72.

Shares of Bank of America increased by 1.8% after the bank announced better-than-expected quarterly results, with CEO Brian Moynihan citing signs of a "resilient American economy," including solid consumer spending. Shares of Morgan Stanley gained 4.5% following better-than-expected quarterly results.

In other dealings, gold and silver prices were higher. Gold's price climbed 0.3% on Thursday to $4,836.50 an ounce, while silver prices rose 0.6% to $80.14 per ounce.

The U.S. dollar fell to 158.92 Japanese yen from 159 yen. The euro was trading at $1.1788, down from $1.1799.