Asian equities climbed to fresh highs on Thursday after Wall Street’s benchmark posted a third straight record close, as a solid start to the US earnings season helped investors look beyond rising oil prices.
Japan’s benchmark briefly rose above 60,000 for the first time, South Korea’s Kospi reached a record high and Taiwan’s main index also touched an all-time peak.
The gains came even as Brent crude extended its advance after Iran seized two vessels in or near the Strait of Hormuz.
This underscores how investors are still willing to back risk assets so long as corporate earnings remain supportive and supply shocks do not yet threaten global growth in a material way.
Record run extends across Asia
MSCI’s broadest index of Asia-Pacific shares outside Japan rose about 1% to a record.
Japan’s rally was led by exporters and technology names, while regional sentiment was buoyed by another upbeat session on Wall Street.
Taiwan Semiconductor Manufacturing Co gained 3.2%, while Samsung Electronics climbed 2.6%, adding momentum to a broader advance in chip and AI-linked shares.
The backdrop from the US remained supportive.
On Wednesday, the S&P 500 rose 1%, the Dow Jones Industrial Average added 0.81% and the Nasdaq Composite advanced 1.6% to a record close.
The move came after Tesla reported surprise positive first-quarter free cash flow, reinforcing optimism that the early stages of the reporting season may be strong enough to offset anxiety over geopolitics, inflation and energy costs.
Oil risk remains in focus
Brent crude rose another 0.5% to $102.45 a barrel after jumping 3.5% in the previous session.
The latest move followed Iran’s seizure of two vessels linked to Gulf shipping routes, the newest escalation in a months-long standoff that has periodically disrupted maritime traffic through one of the world’s most sensitive energy corridors.
For now, investors appear to believe the incidents do not pose an immediate threat to global oil supply.
Even so, the seizures have revived concerns that any further deterioration could lift freight costs, tighten supply chains and keep pressure on inflation.
Analysts at ING said there was a pause for breath after the spike in oil, but little sign of a durable end to the confrontation, with both sides still engaged in a wider battle of signals and rhetoric.
Wall Street tempers the mood
US stock futures pointed to a softer open on Thursday, with S&P 500 futures down 0.3% and Nasdaq 100 futures off 0.2%, suggesting some consolidation after the latest record close.
Treasury yields were little changed, with the two-year at 3.8064% and the 10-year at 4.3094%.
The dollar was broadly flat, while the euro held near $1.1709.
Investors are now weighing whether markets are becoming too comfortable with accumulating risks.
The analysts questioned whether financial markets were fully reflecting the likelihood that supply constraints could persist for some time.
That tension is likely to define the next leg of the rally.
Strong US earnings are keeping equities buoyant, but a prolonged disruption in Gulf shipping or another sharp rise in crude could yet test that optimism.
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