Asian shares rose on Thursday, tracking record-setting gains on Wall Street and aided by stronger-than-expected Chinese economic data, even as a U.S. naval blockade near Iran pushed oil prices above $100 a barrel and clouded the global outlook.
Regional markets react to wall street records
Japan led the region’s advance.
- The Nikkei 225 jumped 2.6% to 59,624.0, a fresh all-time high.
- The broader TOPIX climbed 1.3%, driven by technology and semiconductor names on optimism over sustained demand for artificial intelligence hardware.
Elsewhere in Asia:
- South Korea’s KOSPI gained 2%, moving close to its previous highs for the year.
- Hong Kong’s Hang Seng index added more than 1%.
- Shanghai’s Composite index rose 0.4%, while the CSI 300 advanced 0.7%.
- Singapore’s Straits Times index slipped 0.2%.
- Futures on India’s Nifty 50 were broadly flat.
- Australia’s S&P/ASX 200 edged 0.2% lower.
Overnight in the United States, the S&P 500 and Nasdaq both closed at record highs, supported by strong corporate earnings and easing geopolitical anxiety amid diplomatic efforts to reduce tensions between Washington and Tehran.
U.S. naval blockade jolts energy markets
Despite those talks, Washington has moved to tighten pressure on Iran, enacting a naval blockade targeting Iranian ports. Military vessels have been positioned near the Strait of Hormuz, a key chokepoint for global oil trade, to restrict maritime traffic.
The move has had an immediate impact on energy markets:
- Brent crude has surged more than 27%, from about $80 per barrel in March to above $102 by mid-April.
- The Strait of Hormuz handles roughly 20% of worldwide oil shipments, magnifying the effect of any disruption.
Analysts warn that altered shipping routes and higher transport and insurance costs could reshape trade flows and energy supply dynamics, with knock-on effects for inflation and growth.
Chinese data beats forecasts but caution persists
China’s latest economic figures provided some relief to regional markets.
Key first-quarter readings:
- Gross domestic product grew 5.0% year-on-year, beating forecasts of 4.8% and accelerating from 4.5% previously.
- March industrial production increased 5.7%, above expectations of 5.4%.
- March retail sales rose 1.7%, missing the 1.9% consensus and underscoring still-fragile consumer demand.
The upbeat headline growth supported modest gains in mainland shares, but Chinese officials and analysts remain wary. As the world’s largest energy importer, China faces mounting risks from elevated oil prices, which could squeeze margins and weigh on activity in the second quarter and beyond.
Australia labor data steady, sentiment mixed
In Australia, the S&P/ASX 200 slipped 0.2% after labor market figures showed:
- Unemployment steady at 4.3% in March.
- Slower overall job creation, even as full-time employment remained relatively resilient.
The data reinforced a picture of a cooling but still tight labor market, adding to uncertainty over the timing and extent of any future policy shifts by the Reserve Bank of Australia.
Global outlook darkens as oil shock feeds stagflation fears
The sharp jump in oil prices is prompting a broad reassessment of the global economic outlook among large asset managers. A recent Bank of America survey highlighted a rapid deterioration in sentiment:
- A net 36% of fund managers now expect weaker global activity, versus just 7% previously.
- 76% describe the current backdrop as stagflationary, combining slow growth with elevated inflation.
Central banks are responding with increased caution. The Federal Reserve’s latest Beige Book flagged rising uncertainty tied to the conflict and higher energy costs, complicating the path for monetary policy. Expectations for interest rate cuts that were widely anticipated earlier in the year have been pared back.
Volatility risks rise in speculative markets
This mix of geopolitical tension, higher energy prices, and shifting policy expectations is seen as a catalyst for greater volatility, particularly in more speculative, momentum-driven segments of global markets.
Periods of stress typically bring:
- Abrupt price swings.
- A flight to safer, more liquid assets.
- Reduced appetite for exposure to areas highly dependent on global liquidity conditions.
Technology and chips remain a bright spot
Against this uncertain backdrop, technology shares — especially semiconductor-related firms — continue to stand out as a structural growth story, driven by the rapid build-out of AI infrastructure.
According to projections from Gartner:
- Global semiconductor revenue is expected to jump by about 64% in 2026.
- Memory chip prices are forecast to rise sharply, with DRAM seen up around 125% and NAND up roughly 234%.
These expectations are underpinning demand for chipmakers across Asia, particularly in Japan, South Korea, and Taiwan, and were a major pillar of Thursday’s gains in regional equity markets.
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