Easing US-Iran Conflict Prompts Asia-Pacific Market Recovery, South Korea’s Kospi Hits Largest Weekly Gain in 5 Years.

TradingKey - Boosted by factors such as the continued progress of the U.S.-Iran ceasefire agreement and signals from Israel regarding negotiations with Lebanon, risk appetite in Asia-Pacific markets continued to recover, with Asia-Pacific stock markets closing higher.

At the close, the Nikkei 225 index rose 1.84% to 56,924.11 points, with a weekly gain of 7.15%; the KOSPI rose 1.4% to 5,858.87 points, accumulating a weekly gain of 8.96%, its largest weekly increase since January 2021.

The catalyst for this round of the rally was the last-minute announcement of a ceasefire by both the U.S. and Iranian sides on April 8.

U.S. President Trump announced on social media on the evening of the 7th local time that he agreed to suspend bombings and attacks on Iran for two weeks, provided that Iran agrees to fully open the Strait of Hormuz; both sides are scheduled to launch political negotiations in Islamabad, the capital of Pakistan, on April 10.

Analysts noted that with the U.S., Israel, and Iran reaching a ceasefire agreement and the restoration of safe passage through the Strait of Hormuz, although Iran has limited daily vessel traffic, its stance has softened compared to previous hostility. Market panic over energy supply disruptions has partially receded, and the logic of global asset pricing has shifted from safe-haven priority to a recovery in risk appetite, driving a broad-based rally.

David Kotok, co-founder of Cumberland Advisors, referred to this rally as the "Hope of Hormuz" rally. News of easing geopolitical risks directly improved risk appetite in Asia-Pacific markets. Previous market shocks have not changed the long-term value of core assets, and Japanese and South Korean stock markets still possess upside resilience.

It should be noted that the sustainability of this rally primarily depends on the implementation of the ceasefire agreement. Uncertainties remain in the negotiation process, and Asia-Pacific markets still need to be wary of risk reversals. Subsequently, the market will gradually return to being driven by fundamentals.