Asian Equities Poised to Open on a Positive Note Following US Market Rebound
Market Optimism Ahead of Asian Trading
Asian markets are poised to open with modest gains, following a positive close in US shares on Thursday. The S&P 500 Index ended the day up 0.1% after an earlier decline of as much as 1.5%, while the Nasdaq 100 also finished 0.1% higher. Oil prices surged above $110 a barrel following US President Donald Trump's vow to escalate the Iran war, despite his efforts to pressure Iran into a deal to end the conflict.
The potential reopening of the Strait of Hormuz, a critical waterway for oil shipments, is a significant factor in the market's optimism. Iran is drafting a protocol with Oman to monitor traffic through the strait, which could lead to shippers paying tolls to the Islamic Republic. Iran Deputy Foreign Minister Kazem Gharibabadi confirmed the development, stating that this would be a requirement for traffic through the strait.
The sustainability of the recovery in equity markets, however, remains uncertain. With oil prices in the driver's seat of risk appetite, the market's resilience to a higher embedded premium in oil is a concern. This has led to a pattern of late-week selloffs, as nervous investors unwind positions that could be upended by weekend developments threatening the global economy.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Key Economic Indicators
| Market | Thursday's Close | Friday's Outlook |
|---|---|---|
| S&P 500 | 0.1% gain | Modest gains expected |
| Nasdaq 100 | 0.1% gain | Modest gains expected |
| Oil Prices | Above $110 a barrel | Stable |
US stocks began Thursday deep in the red after Trump's speech failed to reassure investors that the war in the Middle East was nearing a swift resolution. The president has previously set a two-to-three-week timeline for ending the conflict, but his latest threats on Iranian infrastructure have raised concerns about the duration of the disruptions to global energy supplies.
Market analysts remain uncertain about the persistence of these disruptions, with sentiment likely to remain headline-driven in the coming sessions. Volatility is expected to remain elevated over the short term, at least.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Other Market Developments
Tesla Inc. shares fell after the company reported one of its worst sales quarters in years, missing Wall Street's expectations. The company is struggling to turn around its core business and navigate an increasingly challenging electric-vehicle market.
US labor-market data on Thursday gave mixed signals, with a 25% increase in job-cut announcements in March from the previous month, according to a report from Challenger, Gray & Christmas Inc. Initial jobless claims, however, unexpectedly fell in the week through March 28.
In corporate news, a group of private credit firms led by Blackstone Inc. has refused to extend another lifeline to software company Medallia, putting pressure on owner Thoma Bravo to inject more equity into the troubled business or hand over the keys via a debt restructuring.
Market Previews
- S&P 500 futures: little changed as of 7:28 a.m. Tokyo time
- Hang Seng futures: rose 0.6%
- S&P/ASX 200 futures: little changed
- Euro: little changed at $1.1540
- Japanese yen: little changed at 159.57 per dollar
- Offshore yuan: little changed at 6.8900 per dollar
- Bitcoin: little changed at $66,894.26
- Ether: fell 0.5% to $2,057.14
Investor Takeaway
Asian equities may open with modest gains following the US market rebound.
More in Market
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