Asian shares were mixed on Monday, while oil prices jumped 3% after President Donald Trump rejected Iran's response to a ceasefire proposal, raising concerns about potential supply disruptions in the Middle East.
Market Movements
Japan's Nikkei 225 index edged up 0.2% in morning trading, while South Korea's Kospi slipped 0.3%. Hong Kong's Hang Seng index fell 0.5%, and China's Shanghai Composite was flat. Australian shares gained 0.4%.
Oil prices surged as Brent crude rose 3.1% to $78.50 per barrel, and West Texas Intermediate climbed 3.2% to $74.80 per barrel. The increase came after Trump stated that Iran's response to the ceasefire proposal was unacceptable, raising the possibility of further sanctions or military action.
Geopolitical Tensions
The rejection marks a setback for diplomatic efforts to de-escalate tensions in the region. Iran had submitted a counterproposal through intermediaries, but Trump dismissed it as insufficient. Analysts warn that the standoff could disrupt oil supplies from the Strait of Hormuz, a critical chokepoint for global crude shipments.
Investors are closely monitoring developments as the situation remains fluid. The uncertainty has prompted a flight to safe-haven assets, with gold prices rising 0.5% to $2,350 per ounce.
Economic Data
In economic news, Japan reported a 0.3% increase in industrial production for March, slightly below expectations. China's consumer price index rose 0.1% year-on-year in April, indicating subdued inflationary pressures.
Market participants are awaiting further cues from central banks, with the Federal Reserve's next policy meeting scheduled for June. The dollar index edged higher against a basket of currencies, reflecting cautious sentiment.
