(Sharecast News) - Asia-Pacific markets pared gains on Tuesday as a rebound in oil prices underscored persistent uncertainty around the trajectory of the Middle East conflict.
As Stephen Innes, managing partner at SPI Asset Management, put it, "the tape opened calmly, but it was trading like a fault line under pressure."
Investor sentiment was initially supported after US president Donald Trump said he had instructed the military to delay planned strikes on Iran's power plants and energy facilities for five days following discussions with Iranian officials.
However, Iranian state media denied that any talks had taken place.
In a Truth Social post, Trump said: "I AM PLEASE TO REPORT THAT THE UNITED STATES OF AMERICA, AND THE COUNTRY OF IRAN, HAVE HAD, OVER THE LAST TWO DAYS, VERY GOOD AND PRODUCTIVE CONVERSATIONS REGARDING A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES IN THE MIDDLE EAST," although the conflicting narratives kept markets cautious.
Innes said the postponement "was supposed to be the reset button. Instead, it has become another layer of uncertainty.
"That is not deescalation. That is conditional calm with a fuse attached."
Tokyo benchmark makes gains as investors parse economic data
In Japan, the Nikkei 225 rose 1.43% to 52,252.28, while the Topix gained 2.1% to 3,559.67.
Tokio Marine Holdings surged 17.07%, with Sumitomo Pharma up 7.35% and Sumitomo Metal Mining rising 5.43%.
Economic data showed Japan's core consumer inflation slowed below the Bank of Japan's 2% target in February for the first time in nearly four years, partly reflecting government fuel subsidies offsetting higher import costs linked to a weak yen and elevated oil prices.
Business activity also softened, with the S&P Global manufacturing PMI falling to 51.4 in March from 53.0, below expectations of 52.8, while the services PMI declined to 52.8 from 53.8.
The composite PMI eased to 52.9, marking the slowest expansion in 12 months amid weaker new orders and concerns tied to the Middle East conflict.
Greater China, Korean equities in the green
Chinese markets advanced, with the Shanghai Composite up 1.78% at 3,881.28 and the Shenzhen Component gaining 1.43% to 13,536.56.
CECEP Wind-Power climbed 10.09%, while Lotus Health Group and Black Peony Group both rose just over 10%.
In Hong Kong, the Hang Seng Index outperformed, rising 2.79% to 25,063.71, led by gains in Laopu Gold, up 16.11%, WuXi AppTec, which added 10.61%, and Tingyi, up 9.98%.
South Korea's Kospi 100 rose 2.9% to 6,363.18, supported by strength in battery-related stocks, with EcoPro Materials up 11.48%, LG Energy Solution gaining 10.25% and LG Chemicals rising 8.28%.
Sydney manages gains, Wellington underperforms
In Australia, the S&P/ASX 200 edged up 0.16% to 8,379.40, with gains in mining stocks including Genesis Minerals, up 6.92%, PLS Group, up 6.57%, and Liontown Resources, up 6.53%.
Earlier in the session, the index had risen 1.2% to 8,464, snapping a three-session losing streak after hitting a 10-month low.
However, economic data pointed to weakening momentum, with the S&P Global manufacturing PMI slipping to 50.1 in March from 51.0, while the services PMI fell sharply to 46.6 from 52.8, marking the first contraction in over two years.
The composite PMI dropped to 47.0 from 52.4, ending an 18-month expansion.
New Zealand underperformed the region, with the S&P/NZX 50 falling 1.53% to 12,701.75.
Serko declined 5.66%, Synlait Milk fell 4%, and A2 Milk Company dropped 3.28%.
Dollar strengthens as oil prices rise
In currency markets, the dollar strengthened modestly, last trading up 0.14% on the yen at JPY 158.66, as it gained 0.55% against the Aussie to AUD 1.4341 and rose 0.39% on the Kiwi to change hands at NZD 1.7136.
Oil prices moved higher, with Brent crude futures last up 1.65% on ICE at $101.59 per barrel, and the NYMEX quote for West Texas Intermediate rising 2.52% to $90.35.
Reporting by Josh White for Sharecast.com.
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