Iran negotiation breakthrough boosts Asia-Pacific stock markets, South Korea index hits new high, tech stocks lead gains, oil prices continue to fall

Signs of renewed negotiations between Iran and the United States have boosted market sentiment, with Asia-Pacific stock markets rising in early Tuesday trading, led by technology stocks, while international oil prices declined further on expectations of eased tensions.

As mentioned by WallstreetCN, Iran’s Supreme Leader Mojtaba Khamenei approved sending a negotiation delegation to Islamabad on the night of the 20th. According to Xinhua News Agency quoting U.S. Axios website, U.S. Vice President Vance is expected to depart for the Pakistani capital on the morning of the 21st Eastern Time. Trump envoy Steve Witkoff and presidential son-in-law Jared Kushner will also accompany the delegation.

Capital Group equity portfolio manager Noriko Chen stated:

Entering peace negotiations is clearly a positive signal, indicating some form of resolution is approaching. We expect inflation to be slightly higher than recent levels, but do not believe it will ultimately have a major impact on the global economy.

While Middle East developments are boosting risk sentiment, South Korea’s strong export data for the first 20 days of April is providing additional support to Asia-Pacific markets.

According to WallstreetCN, South Korea Customs data released on April 21 shows that from April 1 to 20, South Korea’s exports increased by 49.4% year-on-year, with total exports reaching $50.4 billion, a record for the period, surpassing the previous high of $36.4 billion set in April 2022.

Driven by the boom in artificial intelligence and data center investments, semiconductor exports surged by 182.5% to $18.3 billion, raising their share of total exports to 36.3%, also setting a new record for the period. Computer peripheral exports soared by 399% to $2.2 billion, further confirming strong global demand for data center infrastructure.

The Philadelphia Semiconductor Index has risen for 14 consecutive days overnight, setting the longest streak in over a decade. Ultima Markets analyst Elon Gu said:

Semiconductor momentum continues, boosted by record highs in U.S. chip stocks, with Asia-Pacific technology sectors broadly rallying on Tuesday.

On Tuesday, Asia-Pacific stock markets generally followed the rebound in risk appetite. The MSCI Asia-Pacific Index rose 0.5%, with about equal numbers of rising and falling stocks.

The technology sector is the main driver in this round of Asia-Pacific market gains. MSCI Asia-Pacific Technology Index rose 2.1%, expanding its year-to-date gains to over 38%. South Korea’s KOSPI rose 2.2%, hitting a record high.

Samsung Electronics and SK Hynix led the rally, rising up to 2.6% and 4% respectively. South Korea’s KOSDAQ small-cap index at one point increased by 1%.

The Philadelphia Semiconductor Index has closed higher for 14 consecutive trading days, a record only surpassed once in 2014. IG International market analyst Fabien Yip said:

AI has returned to market focus, and Asian tech stocks, as core hardware suppliers, are rising in a warming risk environment.

In addition, there are major developments at the corporate level in the tech sector. WallstreetCN mentioned that Amazon announced an additional $5 billion investment in Anthropic PBC, with the possibility of a further investment of up to $20 billion in the future to strengthen their partnership in the increasingly competitive AI field.

Aside from Middle East tensions, several macro events this week deserve investors' attention.

March retail sales data will be released on Tuesday, and analysts expect a significant jump in overall retail sales. However, stripping out gasoline and autos, the data may indicate more moderate consumer demand, as high fuel costs are forcing budget-constrained consumers to cut other expenditures.

Fed Chair nominee Waller will also testify before the Senate Banking Committee at 10 a.m. Tuesday. As noted by WallstreetCN, according to an advance copy of his opening statement, Waller said:

I believe monetary policy independence must be earned through action, and better policy decisions depend on avoiding interference. I commit to ensuring that monetary policy implementation remains strictly independent.

The U.S. Treasury market was little changed during the Asia-Pacific session Tuesday, with the 10-year yield up 0.1 basis points at 4.255%.

S&P 500 futures rose 0.2%, after the index slightly retreated from a historical high on Monday. Spot gold prices dipped 0.25% to below $4,810.

Spot silver prices remain in a downward trend, falling 0.36% to $79.41.

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