Asian stocks rise as Middle East tensions ease, commodities fall
Asian stock markets experienced a rebound on Monday as tensions in the Middle East appeared to ease, leading to a decline in demand for safe-haven assets like the U.S. dollar and a rise in bond yields. The broadest index of Asia-Pacific shares increased by 0.83% as investors' concerns about a possible retaliation from Iran after an Israeli drone attack dissipated when Iran stated it had no plans for further military action.
Market sentiment was also influenced by expectations of Federal Reserve policy decisions, with investors closely watching for potential interest rate cuts. Meanwhile, concerns about the earnings of companies in the chip sector suggested a cautious outlook on part of the investors. The yield on the 10-year U.S. Treasury note edged up 4 basis points to 4.656%, approaching a five-month high of 4.696%.
Crude oil prices declined, with Brent futures falling to $86.62 a barrel and the U.S. WTI crude dropping to $81.58 a barrel for the June contract. This reflected a shift in focus back to market fundamentals and a reduced fear of supply disruptions following the de-escalation in the Middle East. Despite the current market rebound, investors are expected to remain vigilant, considering various global economic factors, including the upcoming policy rate decision by Bank Indonesia and the anticipation of big tech earnings reports.
