Asian Shares Extend Gains On US-Iran Deal Hopes

(RTTNews) - Asian stocks ended higher on Friday, extending gains from the previous session on rising hopes for a diplomatic resolution to the Middle East conflict.

With Iran reviewing the latest proposal from the U.S. and Pakistan acting as the mediator, investors are pinning hopes that the tree-month war may end soon with a peace deal.

The dollar was firm around a six-week high and spot gold dipped toward $4.500 an ounce amid fears that elevated oil prices will fuel inflation and force central banks to keep interest rates higher for longer.

Brent crude prices jumped nearly 3 percent toward $106 a barrel after reports emerged that Iran is discussing with Oman ways to establish a toll system for ships transiting the Strait of Hormuz.

China's Shanghai Composite index gained 0.87 percent to close at 4,112.90, after having logged its biggest drop since March on Thursday.

Hong Kong's Hang Seng index ended up 0.86 percent at 25,606.03, led by tech shares. Lenovo soared 19.8 percent after delivering exceptional fourth-quarter results.

Japanese markets closed on a buoyant note after the so called "core inflation" rate softened to over four-year low in April, potentially weakening the case for an early rate hike by the Bank of Japan.

Core inflation cooled to 1.4 percent in the month, easing from 1.8 percent in March and marking the lowest reading since March 2022.

The Nikkei average jumped 2.68 percent to 63,339.07, marking a record close. The broader Topix index settled 1 percent higher at 3,892.46. AI and chip-linked stocks led the surge, with SoftBank Group shares surging 11.9 percent.

Seoul stocks rose modestly after a measure of consumer sentiment rose in May. The Kospi index ended 0.41 percent higher at 7,847.71. extending gains for a second straight session.

Samsung Electronics fell 2.3 percent after rising sharply in the previous session on a last-minute deal to avert a massive labor union strike.

Australian markets advanced after weak jobs data prompted traders to scale back their rate hike expectations. The benchmark S&P/ASX 200 rose 0.41 percent to 8,657, extending gains for a second consecutive session led by materials stocks. The broader All Ordinaries index inched up by 0.41 percent to 8,877.20.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index surged 0.88 percent to 12,991.31, reaching its highest level since May 14 after the release of upbeat retail sales data.

U.S. stocks ended a choppy session slightly higher overnight as oil prices and bond yields retreated on hopes for a diplomatic way out of the war in Iran.

Investors reacted to reports suggesting that Iran's Supreme Leader has issued a directive that the country's near-weapons-grade uranium should not be sent abroad.

Later, a senior Iranian official said no new order has been issued, calling the reports "propaganda by the enemies of the deal."

On the earnings front, chip giant Nvidia reported better than expected first quarter results, but the focus was on how long it can sustain rapid growth.

Walmart reported its slowest growth in a key sales metric in two years and issued a profit warning for the current quarter.

The Dow rose 0.6 percent to reach a new record closing high while the S&P 500 added 0.2 percent and the tech-heavy Nasdaq Composite finished marginally higher.