Asia-Pacific stock markets experienced broad gains on Wednesday, driven by signals of potential de-escalation in U.S.-Iran tensions and positive economic data from several major regional economies.
Markets in South Korea and Japan led the rally, with South Korea's Kospi index posting its largest single-day gain in recent weeks.
Regional Market Performance
South Korea
The Kospi index rose by over 6.5%, while the small-cap Kosdaq gained 5.38%. The rally followed data showing South Korean exports in March increased by 48.3% year-on-year, surpassing a Reuters poll estimate of 44.9%.
Technology stocks were key drivers, with SK Hynix gaining 60% and Samsung Electronics rising 35% during the month. HSBC upgraded South Korea to 'neutral' from 'underweight', citing reduced downside risks from geopolitical volatility and support from the energy storage, shipbuilding, defense, and nuclear power sectors.
Japan
The Nikkei 225 climbed 4.04%, led by financial stocks, while the broader Topix index added 3.79%.
The Bank of Japan's Tankan survey for the first quarter of 2026 showed optimism among large manufacturers rose to 17 from 15, exceeding expectations of 16 and reaching its highest level since the fourth quarter of 2021. Sentiment among large non-manufacturers remained at 36, consistent with the previous quarter and above the Reuters poll expectation of 33.
Hong Kong and Mainland China
The Hang Seng index increased by 1.71%, driven by basic materials stocks. The CSI 300 index rose by 1.47%.
A private survey indicated that China's manufacturing activity slowed in February, with the RatingDog PMI at 50.8, missing the Reuters-polled analyst forecast of 51.6 and declining from 52.1 in February.
Australia and Taiwan
Australia's S&P/ASX 200 advanced by 1.7%, primarily due to a rise in educational services stocks. Taiwan's benchmark stock index increased by 1.8%, achieving a record high for the fifth consecutive trading session.
Geopolitical Developments and Commodity Markets
U.S. President Donald Trump stated that the U.S. could withdraw from Iran in "two or three weeks," saying, "We leave because there's no reason for us to do this." In his earlier State of the Union address, Trump stated regarding Iran, "We are in negotiations with them. They want to make a deal, but we haven't heard those secret words: we will never have a nuclear weapon. My preference is to solve this through diplomacy."
China hosted Iran's Foreign Minister Abbas Araghchi on Wednesday, ahead of Trump's scheduled visit to Beijing.
Following these statements, U.S. crude futures rose by 1.34% to $102.72 per barrel, and Brent futures increased by 1.27% to $105.29 per barrel.
A report by BMI indicated a 50% probability of a U.S.-led military action against Iran, a factor contributing to an elevated risk premium in oil prices.
Broader Market Context
In a separate session, Asian stock markets, including South Korea and Japan, reached record highs on April 9, 2025, following a technology-driven rally on Wall Street. Bitcoin also saw an increase of approximately 2%, returning to the $65,000 range after briefly falling below $63,000.