(Sharecast News) - Asia-Pacific markets closed mixed on Tuesday, with investors balancing gains in technology and automotive stocks against persistent geopolitical uncertainty as the war involving Iran continued to drive volatility in energy markets.
"Asian markets extended their rally into a second day, buoyed by positive comments from Nvidia that fuelled optimism about tech stocks in the region," noted Patrick Munnelly, market strategy partner at TickMill, although he added that "a modest upswing in global markets, led by gains in the tech sector, appeared to lose steam as the European session approached."
Regional sentiment was supported by strength on Wall Street, where major US indexes rose overnight as markets attempted to recover from a recent losing streak, although US stock futures were little changed.
Oil prices moved higher again on Tuesday, with Brent crude futures last up 2.97% on ICE to $103.19 a barrel and the NYMEX quote for West Texas Intermediate gaining 3.24% to $96.53, as supply concerns linked to the conflict remained front of mind.
Munnelly said that "escalating tensions in the Middle East sent crude oil prices soaring," adding that "Brent crude jumped 4.4%, surpassing $104 per barrel after rebounding from Monday's 2.8% decline, spurred by reports of Iran targeting critical infrastructure in the Persian Gulf."
Investor focus also remained on geopolitics, with US president Donald Trump reportedly looking to delay a planned meeting with his Chinese counterpart Xi Jinping by "a month or so" due to the Middle East conflict, having originally been expected to travel to China at the end of March.
Munnelly highlighted that "the Strait of Hormuz has become the epicentre of escalating tensions in the Middle East," warning that the situation is "steering investor attention beyond the crude oil supply itself, spotlighting the broader repercussions on refined products, petrochemical inputs, and maritime logistics."
Markets mixed across the region
In Japan, the Nikkei 225 edged down 0.09% to 53,700.39, even as the broader Topix index rose 0.45% to 3,627.07.
Losses in heavyweight technology names weighed on the benchmark, with Furukawa Electric falling 6.68%, Sumitomo Electric Industries down 6.16%, and Lasertec dropping 5.16%.
Munnelly noted that "the Japanese yen captured significant attention as it inched closer to the 160-per-dollar mark, reflecting concerns over Japan's heavy dependence on imported energy," adding that "market watchers anticipate that the Bank of Japan will maintain its current interest rates in its upcoming policy meeting, with a potential rate hike of 0.25% expected later this summer in July."
Chinese markets were mixed, with the Shanghai Composite rising 0.85% to 4,049.91, supported by strong gains in Anyang Iron & Steel, which jumped 10.16%, Shanghai AJ Group up 10.11%, and Huadian Liaoning Energy Development advancing 10.07%.
In contrast, the Shenzhen Component declined 1.87% to 14,039.73.
Hong Kong's Hang Seng Index added 0.13% to 25,868.54, led by Geely Automobile Holdings, which climbed 4.55%, alongside gains in Longfor Properties, up 4.44%, and China Resources Mixc Lifestyle, which rose 4.41%.
South Korea outperformed, with the Kospi 100 rising 1.67% to 6,472.12.
Gains were driven by Samsung Electro-Mechanics, which surged 8.11%, Hanwha Solutions up 7.38%, and Kumho Petro Chemical advancing 6.78%.
Sydney manages gains as RBA hikes interest rates
Australia's S&P/ASX 200 rose 0.36% to 8,614.30, with Telix Pharmaceuticals gaining 6.56%, Westgold Resources up 4.87%, and Summerset Group Holdings rising 4.38%.
The Reserve Bank of Australia raised its benchmark cash rate by 25 basis points to 4.1%, a 10-month high, marking its second consecutive increase as policymakers warned of a "material" risk to inflation amid the global oil shock triggered by the Middle East conflict.
The decision, passed by a narrow 5-4 vote, reflected a split over timing rather than direction, with RBA governor Michele Bullock emphasising that further tightening was likely necessary.
Munnelly said there was "growing concern about a two-tier energy shock," adding that "countries that don't rely as much on natural gas and have more diverse energy grids are likely to have less severe inflationary effects," while "countries that do rely on gas may have more serious economic problems."
The central bank noted that inflation risks had tilted to the upside, with headline CPI running at 3.8% in January and core inflation at 3.4%, while the labour market remained tight with unemployment at 4.1%.
The economy expanded 2.6% year-on-year in the December quarter, outpacing the bank's estimate of potential growth.
Markets were pricing a roughly 40% chance of another rate increase in May, with a move to 4.35% by August fully priced in.
Across the Tasman Sea in New Zealand, the S&P/NZX 50 rose 0.13% to 13,182.23, led by Vista Group International, up 2.77%, Chorus, which gained 1.98%, and Meridian Energy, up 1.67%.
Dollar mostly stronger on regional currencies
In currency markets, the dollar was little changed against the yen, up 0.03% at JPY 159.11.
It weakened 0.19% against the Aussie to AUD 1.4114 after the RBA's rate decision, while strengthening 0.4% against the Kiwi to NZD 1.7132.
Munnelly added that "on the currency front, the dollar strengthened, while US Treasuries faced a selloff across maturities, pushing the 10-year yield up by 3 basis points to 4.24%."
Reporting by Josh White for Sharecast.com.
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