Asian stocks rise after Israel-Iran pause; Kospi gains 3.4%

Asian markets rebounded on Tuesday after Israel and Iran signalled a pause in attacks, giving investors reason to buy back into assets hit by overnight geopolitical fears. South Korea’s Kospi rose 3.4% and Japan’s Nikkei gained 0.9%. MSCI’s index of Asia-Pacific shares outside Japan advanced about 1.5%, while Chinese blue chips added 0.4%.

China’s May trade data showed exports up 19.4% and imports up 27.4% year on year, figures that exceeded expectations and pointed to strength in external demand even as domestic consumption remained uneven.

The rally was strongest in Seoul, where chip-heavy names led the recovery after heavy selling the previous session. The Kospi recovered part of Monday’s more than 8% slide that had been driven by forced selling and concerns over chip demand, which left many retail investors exposed through leveraged positions.

U.S. markets provided limited support. The S&P 500 edged higher overnight while most of its constituents finished lower. Futures for U.S. and European shares were subdued in Asian trade. Investors remained cautious with bond yields elevated and shipping through the Strait of Hormuz still heavily disrupted.

Commodity and currency moves reflected the guarded mood. Brent crude eased about 0.7% to $93.57 a barrel after spiking near $98 overnight, and U.S. crude fell to $90.62. Gold traded near $4,334 an ounce, above Monday’s two-month low. The dollar held around 160.17 yen, close to the prior session’s intraday high of 160.395, with market participants warning of intervention risk if the yen weakens beyond April’s 160.725 level. The euro hovered near $1.1538 and sterling was near $1.3347.

Market participants will watch corporate results for signs on demand. Oracle is due to report earnings on Wednesday as investors look for confirmation that spending on artificial intelligence can support valuations in large-cap technology names. Attention also remains on developments in the Middle East and any further disruptions to shipping that could affect energy prices and risk appetite.