(Sharecast News) - Asia-Pacific markets were mostly higher on Tuesday, recovering losses from the previous session as investors looked beyond the latest developments in the Iran conflict and focused on corporate earnings.
US Central Command carried out a 10th consecutive night of strikes after president Donald Trump declared the ceasefire "over", while Iranian forces targeted US military assets across the Middle East and Tehran-backed Houthis announced a maritime embargo against Saudi Arabia.
"Risk has found a little oxygen from two familiar sources: cheaper oil and a semiconductor rebound," said Patrick Munnelly, market strategy partner at TickMill.
"Asian equities snapped back after last week's AI wobble as investors returned to the chip complex, while Brent's retreat below $89 per barrel helped cool the immediate inflation scare."
Oil prices initially fell amid reports that mediators were proposing a 10-day ceasefire between the US and Iran, before reversing higher.
Brent crude futures were last up 0.41% on ICE at $89.59 per barrel, while the NYMEX quote for West Texas Intermediate gained 0.71% to $83.82, after energy prices climbed on Monday following Trump's warning that Tehran would pay for the deaths of three US service members.
"Still, this is not an all-clear. Brent remains far above its July lows, and the Strait of Hormuz risk premium has not disappeared," Munnelly added.
"A pause in strikes would lower the temperature, but it would not erase the inflation impulse already running through fuel, freight and expectations.
"Treasuries held Monday's losses, while gold rose 1% to around $4,050/oz, showing that haven demand has not vanished even as equities rebound."
Equities bounce higher across the region
Japan's Nikkei 225 surged 3.26% to 66,232.19 and the Topix gained 2.44% to 4,014.95.
Kioxia Holdings rebounded 17.18%, Ibiden advanced 11.03% and Socionext rose 9.11%.
Mainland Chinese markets also rallied, with the Shanghai Composite up 1.79% at 3,864.37 and the Shenzhen Component climbing 4.81% to 14,264.29.
Suzhou TZTEK Technology, Raytron Technology and Suzhou HYC Technology each jumped 20%.
Hong Kong's Hang Seng Index edged down 0.04% to 25,132.29, as China Resources Mixc Lifestyle fell 3.24%, Tingyi lost 3.15% and China Resources Land declined 2.78%.
"Asian equities staged a forceful rebound after three days of losses," Munnelly said.
"The MSCI Asia Pacific Index rose 2.2%, with South Korea's Kospi and Taiwan's Taiex both up around 4%.
"Japan's Nikkei 225 gained ... after entering correction territory last Friday, while mainland China's tech sector surged ... helped by buying from state-backed institutions aimed at steadying confidence.
"The message is not that the AI selloff is over. It is that investors are still willing to re-enter the trade when valuations reset and macro pressure eases."
South Korea's Kospi 100 rose 3.94% to 8,400.75, led by gains of 8.19% for Samsung C&T, 6.46% for SK Square and 6.15% for Samsung Electronics.
Australia's S&P/ASX 200 edged up 0.02% to 8,793.30, with Nextdc rising 7.74%, South32 gaining 6.62% and Evolution Mining advancing 5.63%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 fell 0.29% to 13,656.03, as Synlait Milk dropped 5%, Pacific Edge lost 3.77% and Serko declined 3.73%.
Annual inflation in the country accelerated to 4.1% in the second quarter from 3.1%, above forecasts of 4.0% and the Reserve Bank of New Zealand's 1% to 3% target range.
Transport prices surged 10.6%, driven by a 20.1% increase in petrol, while quarterly inflation rose to 1.5% from 0.9%, exceeding estimates of 1.4%.
Dollar mixed against regional peers
In currency markets, the dollar rose 0.1% against the yen to JPY 162.67, but fell 0.38% against the Australian dollar to AUD 1.4236 and declined 0.39% against the New Zealand dollar to NZD 1.7061.
Reporting by Josh White for Sharecast.com.
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