(Sharecast News) - Asia-Pacific markets rallied on Thursday, led by a record close in Japan, as growing optimism over a potential US-Iran deal boosted global risk sentiment, while investors also tracked fresh highs on Wall Street amid expectations the conflict could soon ease.
As Patrick Munnelly, market strategy partner at TickMill, noted, "Global equities are trading with a continued risk tone this morning, with the MSCI All Country World Index hitting a fresh all-time high as investors continue to add risk to signs that the US and Iran may extend their ceasefire."
The rally came as hopes for a diplomatic breakthrough between Washington and Tehran strengthened.
US president Donald Trump said in a Fox Business interview that the Iran war was "very close to over" and that Tehran wanted to "make a deal very badly".
A White House official also told CNBC that a second round of negotiations is under discussion, although no talks have been formally scheduled.
"The current risk-on tone is being driven primarily by hopes that tensions in the Middle East may continue to ease," Munnelly said , adding that "the US and Iran are considering extending the current truce by another two weeks, giving both sides more time to negotiate a broader agreement."
Most markets end positively across Asia
Japan's Nikkei 225 surged 2.38% to a record 59,518.34, supported by gains in technology and consumer cyclical stocks, while the broader Topix rose 1.17% to 3,814.46.
Among individual movers, TDK Corporation jumped 13.06%, Trend Micro gained 9.87% and Daikin Industries climbed 9.09%, with the latter supported by pressure from activist investor Elliott Investment Management to improve performance and narrow its valuation gap with peers.
Chinese equities also advanced, with the Shanghai Composite rising 0.7% to 4,055.55 and the Shenzhen Component gaining 2.05% to 14,796.34.
Jinko Power Technology, Hunan Huasheng and Dalian Thermal Power each rose around 10%.
Data showed China's economy accelerated in the first quarter, with gross domestic product expanding 5%, up from 4.5% in the prior quarter and ahead of a 4.8% Reuters poll forecast, supported by strong exports despite lingering concerns over the global demand outlook amid energy market volatility.
In Hong Kong, the Hang Seng Index climbed 1.72% to 26,394.26, led by gains in Contemporary Amperex Technology, up 9%, Baidu, which rose 7.69%, and Haidilao International, up 6.77%.
South Korea's Kospi 100 advanced 2.35% to 7,208.82, with SKC surging 22.24%, while NCsoft and Samsung SDS gained 7.68% and 6.94%, respectively.
Markets go the other way down under
In contrast, markets in Australia and New Zealand lagged the regional trend.
Australia's S&P/ASX 200 slipped 0.26% to 8,955.00, dragged lower by losses in Reece, down 5.27%, Newmont Corporation, which fell 5.06%, and Viva Energy Group, down 4.53%.
Data showed Australian employment rose 1.4% year-on-year in March, while the unemployment rate held steady at 4.3%.
New Zealand's S&P/NZX 50 edged 0.08% lower to 13,066.06, with Kiwi Property Group, Ryman Healthcare and Ebos Group declining between 2.41% and 3.23%.
Dollar little changed as oil prices move higher
In currency markets, the dollar was little changed against regional peers, last rising 0.06% on the yen to trade at JPY 159.09, as it gained 0.04% against the Aussie to AUD 1.3953, and climbed 0.4% on the Kiwi to change hands at NZD 1.6982.
Oil prices moved higher despite easing geopolitical tensions, with Brent crude futures last up 1.52% on ICE at $96.37 per barrel, and the NYMEX quote for West Texas Intermediate ahead 1.27% at $92.45, as traders weighed the prospect of renewed talks against ongoing uncertainty in the Middle East.
Munnelly noted that "any further de-escalation would likely help contain oil prices, reduce uncertainty, and improve the near-term backdrop for global growth assets," reinforcing the view that "energy upside may be more contained if negotiations continue to progress."
Reporting by Josh White for Sharecast.com.
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