(Sharecast News) - Asia-Pacific markets closed mixed on Thursday as equity markets began to rebound despite renewed US-Iran tensions and elevated oil prices.
"Renewed US-Iran strikes have punched Brent toward $79, strangled traffic through the Strait of Hormuz, and dragged back the one macro risk investors had quietly buried: an energy shock fierce enough to keep inflation sticky and central banks frozen in place," said Patrick Munnelly, market strategy partner at TickMill.
The US launched fresh strikes on Iran in response to Tehran's attacks on commercial shipping in and around the Strait of Hormuz, US Central Command said on Wednesday afternoon.
Earlier, president Donald Trump said he may no longer be interested in negotiating a deal with Iran, after previously saying the ceasefire between Washington and Tehran was "over" following another wave of attacks in the Middle East.
Oil prices edged lower after the recent surge, with Brent crude futures last down 0.58% on ICE at $77.57 per barrel, and the NYMEX quote for West Texas Intermediate falling 0.48% to $73.17.
Munnelly said Brent had risen for three consecutive sessions after the US launched another round of strikes on Iran, leaving crude well above the $72 area seen at the start of the week.
"The market is not just pricing headlines now; it is pricing the risk that energy flows through the Strait of Hormuz become materially impaired," he said.
"A higher oil price is manageable. A disrupted energy artery is harder to ignore."
Munnelly said the renewed disruption shifted the central bank debate from temporary volatility to the possibility of a more persistent supply-driven inflation impulse.
Tech stocks in the green on mixed day for region
Japan's Nikkei 225 rose 1.38% to 67,743.85, while the broader Topix gained 0.35% to 4,020.37.
Kioxia Holdings climbed 8.33% after Bain Capital sold its entire stake in the flash memory maker.
Bloomberg reported that Bain managing partner David Gross confirmed the full exit, citing record-setting returns after the artificial intelligence boom drove Kioxia shares to historic highs.
Advantest rose 5.86%, while Tokyo Electron gained 5.51%.
In China, the Shanghai Composite rose 1.65% to 4,036.59, while the Shenzhen Component surged 3.07% to 15,398.73.
Xi'an Bright Laser Tech jumped 20%, Montage Technology gained 15.64%, and Advanced Micro Fabrication rose 11.49%.
China's consumer prices rose more slowly than expected in June, while wholesale inflation accelerated as elevated energy costs continued to weigh on domestic demand.
Consumer prices increased 1% year on year, below Reuters-polled expectations for 1.1% and down from 1.2% in May.
Core CPI, excluding food and energy, also rose 1%, easing from 1.1%.
Food prices fell 1.6% from a year earlier, compared with a 1.7% decline in May.
Producer prices rose 4.1%, in line with forecasts and up from 3.9% in May, marking the strongest growth since July 2022, according to LSEG data.
On a monthly basis, PPI declined 0.3%.
"China's inflation data offered a softer counterpoint, but not enough to change the global rates story," Munnelly said.
He said energy prices were still rising significantly in annual terms, although month-on-month momentum had turned negative, while food prices remained surprisingly weak.
"That matters because food inflation has not yet transmitted from the energy shock in the way seen during the Russia-Ukraine episode," he said.
"For the global inflation story, that is encouraging. For today's market, it is secondary. The marginal driver is not China CPI. It is whether Hormuz remains functional."
Hong Kong's Hang Seng Index fell 0.7% to 24,030.18.
Laopu Gold dropped 5.57%, J&T Global Express lost 5.56%, and Geely Automobile declined 4.53%.
South Korea's Kospi 100 rose 1.1% to 9,179.90, supported by gains in technology plays.
Hanmi Semiconductor advanced 8.18%, Samsung Card rose 5.83%, and Korea Aerospace added 5.63%.
Australia's S&P/ASX 200 slipped 0.26% to 8,762.50.
Magellan Financial Group fell 5.7%, Deterra Royalties lost 4.23%, and Amcor declined 4.02%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 rose 0.88% to 13,785.67.
Fletcher Building gained 5.56%, Infratil rose 3.06%, and Synlait Milk added 2.74%.
New Zealand's BusinessNZ performance of manufacturing index rose to 54.7 in June from an upwardly revised 51.3 in May, marking the fifth consecutive month of expansion and the strongest factory activity since July 2021.
The reading was also well above the long-term average of 52.5.
New orders surged to 64.1 from 53.2, production rose to 59.4 from 50.6, and deliveries increased to 57.3 from 52.9.
Stocks of finished products and employment also remained firmly above the 50.0 mark.
BusinessNZ director of advocacy Catherine Beard said there were still "real headwinds" from the Middle East conflict and high fuel prices, but said the latest result reflected "a huge positive shift after a long stretch of soft results".
Dollar loses out against Asia-Pacific peers
In currencies, the dollar was last down 0.1% on the yen to trade at JPY 162.43, as it slipped 0.06% against the Aussie to AUD 1.4422, and declined 0.55% on the Kiwi to change hands at NZD 1.7447.
Munnelly said government bonds had sold off across Japan, Australia and New Zealand, extending global fixed-income pressure, while Treasuries were little changed in Asia after the policy-sensitive two-year yield moved close to its highest level of the year on Wednesday.
"The rates market is increasingly sensitive to the risk that higher energy prices force the Fed to keep tightening," he said.
Reporting by Josh White for Sharecast.com.
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