Record Asia highs defy Wall Street pullback

Market Commentary

Asian markets led the charge on Thursday, powering to fresh record highs driven by mounting optimism surrounding a potential Middle East peace deal, easing oil prices and a robust artificial intelligence-fuelled rally in technology stocks. Japan's Nikkei rocketed 5.58%, its largest single-day advance in over a year following a holiday break, while Hong Kong's Hang Seng climbed 1.55% and Shanghai Composite edged up 0.45%, reflecting broad regional enthusiasm.

That exuberance stood in stark contrast to the US pullback, where equities pared Wednesday's record highs as investors awaited Iran's response to a US memorandum proposing an end to hostilities and resuming tanker flows through the Strait of Hormuz. Weekly declines in key energy commodities provided a tailwind for bonds, tempering fears of imminent Federal Reserve rate hikes. The Dow dipped over 0.50% after touching an intraday high of 50 000; the S&P 500 and Nasdaq both eased from peaks. Profit-taking weighed heavily on semiconductors – Micron, AMD and Lam Research each fell around 4%, while McDonald's slumped to a 12-month low despite surpassing earnings estimates. Citi bucked the trend, gaining 1% on news of a $30 billion share buyback.

European stocks slid lower amid softer energy prices and disappointing corporate earnings, with markets closely monitoring US-Iran negotiations for signs of restored Persian Gulf trade. The pan-European STOXX 600 dropped 1% to 617 with STOXX 50 down 0.90% to 5 973. Germany's DAX 40 reversed early gains to close 1% weaker at 24 672; the FTSE 100 also shed 1%. Standouts included Rheinmetall's 7% plunge on first-quarter profit misses, Enel's 2% dip post-results and Shell's 3% tumble amid oil weakness.

Closer to home, South Africa's equities closed on a mixed note as the JSE All Share edged down 0.01%, but mining held firm: Metals and Mining rose 1.53%, Top 40 added 0.09% and Resources climbed 0.96%. Industrials closed 1.10% lower. The rand firmed against the dollar at R16.38 and R22.25 to the pound, gaining 0.07% against the euro.

Precious metals firmed with gold trading at $4 709.51 an ounce, while silver jumped 2.56%. Brent crude declined 0.82% trading at $100.44 per barrel.