Asian stock markets advanced on Tuesday, lifted by renewed expectations of progress in talks between the United States and Iran that eased geopolitical fears and triggered a broad shift back into risk assets.
The Nikkei 225 jumped more than 2.5%, moving close to 58,000 points. China’s Shanghai Composite added 0.55% to edge above 4,000, while Hong Kong’s Hang Seng rose 0.5% to around 25,785.
Diplomatic signals support risk appetite
The rally followed comments from US president Donald Trump, who said Tehran appeared keen to reach a new agreement despite ongoing port blockades.
In a separate interview, vice president Vance said the first round of negotiations, held in Pakistan, had given Washington a clearer view of Iran’s stance. He stressed that some issues — including nuclear activities and reopening the Strait of Hormuz — were “not open to compromise,” underscoring the limits of any potential deal.
A report citing US government officials said internal talks were underway in Washington over a possible second meeting between delegations before the current two‑week ceasefire ends on April 21. The report added that no final decision had been taken and no date had been set.
Regional trading conditions and key meetings ahead
Elsewhere in Asia, markets in India were closed for a public holiday marking the birth anniversary of Dr. B. R. Ambedkar.
Attention later in the global session was expected to turn to Washington, where Lebanese and Israeli envoys were scheduled to meet at 15:00 GMT — another event on traders’ radar in a week dominated by geopolitical developments.
Risk-on mood lifts equities, hits oil
The move across Asian bourses was part of a broader global “risk-on” shift, as easing geopolitical tensions encouraged traders to rotate into growth-oriented assets and reduce exposure to traditional safe havens.
In commodities, Brent crude futures fell 3.2% to $88.45 a barrel on the Intercontinental Exchange, the steepest one-day decline in more than a month, reflecting expectations of reduced disruption to energy supplies.
Global equity funds recorded net inflows of $12.4 billion over the past 48 hours, according to data from EPFR, with a strong tilt toward technology and other growth sectors. The CBOE Volatility Index (VIX), a widely watched gauge of expected near-term stock market swings, dropped 11% to 14.2 — a three-month low — signaling a sharp pullback in perceived risk.
Fragile optimism ahead of ceasefire deadline
Despite the upbeat market reaction, Vance’s firm line on core points of contention highlights how dependent the rally is on diplomatic progress that has not yet been secured.
The ceasefire deadline of April 21 is emerging as a key inflection point. Confirmation of a second round of talks or an extension of the truce would likely reinforce the current risk-on sentiment.
By contrast, failure to extend the ceasefire or show concrete movement toward an agreement could trigger a swift reversal, as risk premia that have just been priced out of markets are quickly reinstated. Over the coming week, price action is likely to be driven more by statements from Washington and Tehran than by traditional economic indicators.
Want deeper macro context behind shifting risk appetite? Explore our guide on fiscal policy and how it works next.
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