Asian stock markets surged on Monday after investors welcomed news of a preliminary peace agreement between the United States and Iran, easing concerns over geopolitical tensions in the Middle East. The positive sentiment spread across regional markets, while investors also looked ahead to a busy week of major central bank decisions, including meetings by the Bank of Japan (BOJ), Reserve Bank of Australia (RBA), and the U.S. Federal Reserve.
South Korea’s KOSPI led gains across Asia, soaring 5.6% and moving closer to record-high levels. Chinese equities also advanced, with the CSI 300 rising 1.3% and the Shanghai Composite gaining 0.9%. Hong Kong’s Hang Seng Index added 0.4%, while Singapore’s Straits Times Index climbed 1.2%. India’s Nifty 50 futures also pointed higher, advancing 1.7%.
Investor confidence improved after Washington and Tehran announced a memorandum of understanding aimed at ending hostilities and reopening the strategically important Strait of Hormuz. The agreement is expected to be formally signed later this week, followed by negotiations regarding Iran’s nuclear program. While uncertainty remains over future developments, the announcement significantly reduced immediate fears of supply disruptions.
The prospect of reduced geopolitical risk pushed oil prices lower, benefiting major Asian economies such as Japan, South Korea, and India, which rely heavily on imported energy supplies passing through the Strait of Hormuz.
Japanese equities posted some of the strongest gains in the region. The Nikkei 225 jumped 5.4%, while the TOPIX gained 3.6%, with both benchmarks reaching record highs. Technology and industrial stocks were among the biggest contributors to the rally.
Market attention is now turning to the Bank of Japan’s policy meeting, where analysts widely expect a 25-basis-point interest rate increase. Investors will closely monitor the BOJ’s economic outlook and future policy guidance, particularly as inflationary pressures remain elevated.
Meanwhile, Australia’s ASX 200 rose 1.3% ahead of the Reserve Bank of Australia’s policy announcement, where interest rates are expected to remain unchanged. Global investors are also awaiting the Federal Reserve meeting later this week for further clues on the direction of monetary policy and its impact on global financial markets.


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