Asian financial markets rallied strongly on Thursday, led by KOSPI, as investors cautiously embraced riskier assets after recent declines caused by escalating conflict in the Middle East. South Korea’s KOSPI surged 11.2%, recovering sharply from historic losses, while Japan’s Nikkei 225 gained 2.5%. China’s CSI300 index climbed 1.4%, and the Shanghai Composite rose 1%, signaling renewed confidence in regional equities.
Wall Street Boosts Investor Sentiment
The Asian rebound followed positive moves on Wall Street, with the S&P 500 rising more than 0.75% and the Nasdaq increasing 1.3%. Gains were supported by improved investor sentiment, even as concerns about the war’s effect on global energy supplies persisted. Brent crude rose 3.5% to $84.25 per barrel, U.S. crude climbed 3.94% to $77.60 per barrel, and spot gold increased to $5,175.47 an ounce, reflecting cautious safe-haven buying.
Geopolitical Tensions Keep Markets on Edge
The U.S. Senate recently backed President Donald Trump’s military campaign against Iran, suggesting that a rapid resolution to the conflict is unlikely. Analysts warned that geopolitical risk could continue to influence energy and commodity markets. “Geopolitical risk can flare up quickly, so early gains in Asia may not be sustained,” said Paco Chow, dealing manager at Moomoo Australia and New Zealand.
China Sets 2026 Growth Target
China announced its economic growth target for 2026 at 4.5%-5%, slightly lower than the 5% growth achieved last year. Beijing also released its 15th five-year plan, emphasizing innovation, high-tech industry investment, and boosting household consumption. The strategy aims to rebalance the economy, curb industrial overcapacity, and maintain moderate growth amid global uncertainty.
Currency and Cryptocurrency Movements
The U.S. dollar strengthened, rising 0.19% against a basket of major currencies. The euro weakened 0.21% to $1.1609, and the Japanese yen declined slightly to 157.15 per dollar. Cryptocurrencies faced pressure as bitcoin fell 0.73% to $72,807.71, while ether dropped 0.66% to $2,136.43.
Outlook: Volatility Likely to Persist
Experts cautioned that while equities rebounded, disruptions to energy flows, transportation networks, and financial stability due to the Middle East conflict could create ongoing volatility. Investors will closely monitor global oil supply, regional tensions, and the war’s wider impact on Asian and international markets in the coming weeks.
