Asia report: Most markets rise on fresh US-Iran truce

(Sharecast News) - Asia-Pacific markets were mostly higher on Monday as investors weighed a pause in hostilities between the US and Iran, although uncertainty over the durability of the agreement kept concerns about Middle East oil supplies in focus.

"Risk appetite is back - and it's back because Washington and Tehran look like they're heading to the table, not the trenches," said Patrick Munnelly, market strategy partner at TickMill.

"Oil, yields and the Dollar all holding inside Friday's ranges is the tell: markets aren't pricing weekend panic; they're pricing de-escalation."

The US and Iran agreed on Sunday to pause hostilities and allow commercial vessels to transit the Strait of Hormuz freely, following a weekend of military exchanges that threatened to derail negotiations aimed at ending their conflict.

The US attacked Iranian military targets over the weekend in retaliation for Iranian strikes in the Strait of Hormuz, with president Donald Trump saying in a Truth Social post: "United States aircraft just struck Iranian missile and drone storage locations, and coastal radar sites, for violating the Cease Fire Agreement, AGAIN!"

Munnelly said US equity futures were firmer at the start of the week after reports that Washington and Tehran had agreed to suspend further military action and resume talks in Qatar.

"The key market message is that investors have not been materially unsettled by the weekend's renewed attacks, because the prospect of diplomacy restarting has again capped the geopolitical risk premium," he said.

Crude prices rose at the start of the week as traders assessed whether the pause would hold and ease concerns over disruption to energy supplies.

Brent crude futures were last up 1.53% on ICE at $73.09 per barrel, while the NYMEX quote for West Texas Intermediate gained 1.91% to $70.55.

Munnelly said Brent, US Treasury yields and the dollar index all remained within Friday's ranges, suggesting markets were treating the latest flare-up as "a disruption to the peace process rather than a collapse of it".

"That said, the conflict risk has not disappeared," he added.

"The Strait of Hormuz remains the central fault line, and the fact that attacks on vessels have resumed means the normalisation narrative is fragile."

Most markets manage gains, Japan retail sales rise

Japan's Nikkei 225 edged up 0.15% to 69,468.11, while the broader Topix rose 0.47% to 3,982.00.

Taiyo Yuden jumped 10.91%, BayCurrent gained 9.71%, and Shift added 9.06%.

Nintendo rose 5.25% after saying it was evaluating the feasibility of a stock split, noting that reducing the minimum trading unit of its shares could help expand its investor base and improve liquidity.

The company last carried out a 10-for-1 stock split in October 2022.

Japan's retail sales rose 5.3% year on year in May, accelerating from an upwardly revised 2.8% increase in April and beating expectations for 3.2% growth.

It was the strongest rise since November 2023, supported by government measures aimed at boosting consumption and easing price pressures.

Sales increased in automobiles, machinery and equipment, other retail goods, department stores, pharmaceuticals and cosmetics, and food and beverages, while non-store retail, fuel, and clothing and personal goods declined.

On a monthly basis, retail sales rose 1.9%, easing from an upwardly revised 2.1% gain in April.

In China, the Shanghai Composite climbed 1.16% to 4,073.90, while the Shenzhen Component rose 0.19% to 15,812.87.

Montage Technology gained 13.08%, Western Superconducting Tech rose 12.99%, and Beijing Piesat Information Technology added 12.62%.

China blacklisted four Japanese government defence research institutes and imposed tighter export restrictions on dozens of other Japanese entities, escalating a campaign to limit Tokyo's access to Chinese-origin dual-use goods.

The Ministry of Commerce added 20 entities to its export control list and another 20, including Mitsui E&S, Terra Drone, nuclear fuel processors and multiple OKI Electric Industry units, to a watch list requiring enhanced licensing scrutiny.

The ministry said exports involving Japanese military users, military uses or any end use that contributed to strengthening Japan's military capabilities would not be approved.

Hong Kong's Hang Seng Index rose 1.57% to 23,026.68.

CSPC Pharmaceutical Group gained 6.88%, WuXi Biologics rose 6.78%, and Innovent Biologics added 6.52%.

Baidu climbed 5.62% after reports that its artificial intelligence chip unit Kunlunxin was targeting an initial public offering in Hong Kong that could value the affiliate at $50bn.

The Information reported that prospective investors had been asked to buy semiconductors worth three to seven times the value of their intended investment in the planned listing.

South Korea's Kospi 100 fell 1.01% to 10,635.29.

Samsung Life dropped 5.55%, Samsung Electronics lost 4.86%, and Samsung C&T declined 4.75%.

Munnelly said South Korea was the main regional focus, with Samsung Electronics and SK Group expected to announce major investment plans alongside new government initiatives.

"If confirmed, that would be a powerful structural support for South Korea's semiconductor and advanced manufacturing base," he said.

"It also matters for the global AI supply chain, because investors are trying to distinguish between short-term positioning volatility and genuine long-term capacity expansion."

He said the near-term challenge remained that the AI trade was crowded, with Samsung and SK Hynix weighing on Asian indices after the recent forced unwind.

"But large-scale investment announcements could help re-anchor the story around long-term demand for memory, data-centre infrastructure and advanced manufacturing," he added.

Neuren leads Sydney gains on EU recommendation for Daybu

Australia's S&P/ASX 200 rose 0.68% to 8,823.40.

Neuren Pharmaceuticals surged 36.07% after saying Daybu had been recommended for approval in the European Union.

If marketing authorisation is granted and the product is launched, the company will be entitled to $35m following the first commercial sale in the EU.

Life360 gained 11.64%, while Zip Co rose 8.68%.

Across the Tasman Sea, New Zealand's S&P/NZX 50 advanced 0.37% to 13,545.56.

A2 Milk Company rose 2.96%, Fisher & Paykel Healthcare Corporation gained 1.98%, and Mainfreight added 1.83%.

Dollar mixed against regional peers

In currencies, the dollar was last up 0.09% on the yen to trade at JPY 161.89 and gained 0.01% against the Aussie to AUD 1.4501, while it slipped 0.13% on the Kiwi to change hands at NZD 1.7706.

Reporting by Josh White for Sharecast.com.