Asia-Pacific markets surge across the board! New developments from the Strait of Hormuz

All markets rise!

On the morning of March 25, Asia-Pacific markets all rose. As of press time, the Nikkei 225 index increased by 2.81%, South Korea’s KOSPI rose by 2.72%, and Australia’s S&P/ASX 200 gained 1.66%.

Gold and silver prices also continued to climb. Spot gold rose 1.72 intraday, to $4,549 per ounce; spot silver increased over 2%, to $72.83 per ounce.

Earlier, there were reports that the U.S. proposed a ceasefire plan with 15 points to Iran. The U.S. intends to pause hostilities for one month to negotiate these 15 items with Iran. However, Iran has not responded yet. Notably, while proposing a ceasefire, the U.S. is also ramping up troop deployments.

Meanwhile, new developments came from the Strait of Hormuz. On the 24th local time, Iran’s Islamic Revolutionary Guard Corps ordered a vessel that had entered the Strait without authorization to return, stating that all ships passing through the Strait must coordinate fully with Iranian maritime authorities.

Asia-Pacific Stock Markets Rally Collectively

Thanks to hopes that negotiations between the U.S. and Iran could end the conflict, Asia-Pacific markets rose collectively today. As of press time, the Nikkei 225 and KOSPI both gained over 2%. SK Hynix rose nearly 4%, Samsung Electronics increased over 2%, and SoftBank Group rose over 3%. SK Hynix has submitted Form F-1 to the U.S. Securities and Exchange Commission to apply for a U.S. listing.

According to Xinhua, citing Israel’s Channel 12 TV on the 24th, the U.S. intends to propose a one-month ceasefire to discuss a 15-point agreement aimed at ending the war with Iran.

Kristina Hooper, Chief Market Strategist at Man Group Plc, said, “Investors tend to stay optimistic because they want to believe the best news. But this optimism carries the risk of mispricing and not fully accounting for downside risks.”

Vanda Research, a U.S. market data analysis firm, said retail trading has cooled since the Iran conflict erupted, with Monday marking a “key turning point,” as retail investors net sold $20.6 million worth of stocks, the first net sell-off since November 2023. However, signs on Tuesday indicated these investors are starting to buy the dip again.

“We are actually becoming more optimistic,” said Michael Brown, Senior Research Strategist at Pepperstone Group Ltd. in London. “There are still many uncertainties, but the key is that since the conflict began, we are seeing for the first time concrete signs that Trump is seeking a way out and easing tensions.” He noted that Trump’s posts during Monday’s trading session triggered a strong risk-on market reaction, which to some extent suggests that if further concrete steps are taken toward ceasefire and normalizing commodity flows, markets might respond accordingly.

However, many fund managers are still maintaining hedged positions, holding high levels of cash, and closely watching oil prices and Federal Reserve signals. The consensus is that any short-term relief rally is fragile, mainly driven by hopes of easing tensions rather than decisive solutions or fundamental shifts.

Jon Vesar, Fund Manager at Pictet Asset Management, said he has not changed his positions, including hedges, due to the unpredictability of the situation, which worries many investors.

Latest Updates on Iran Situation

According to CCTV News, on March 24 local time, Iran’s Navy Commander of the Islamic Revolutionary Guard Corps stated that the container ship Selen was ordered to return after violating laws and unauthorized entry into the Strait of Hormuz. He emphasized that all ships passing through the Strait must coordinate fully with Iranian maritime authorities.

Additionally, Xinhua reported that Iran’s Islamic Republic Broadcasting on the 24th quoted Iran’s Oil Minister Mohsen Khojasteh-Mehr as calling on the UN Secretary-General to condemn U.S. and Israeli attacks on Iran’s critical oil and gas facilities.

Khojasteh-Mehr said such attacks could lead to severe humanitarian and environmental consequences, exceeding limited military actions and amounting to a full-scale war against Iran’s energy security and economy. He stressed that Iran has never initiated any aggression nor seeks to escalate regional tensions.

Notably, while proposing a ceasefire plan, the U.S. is also increasing troop deployments. CCTV reports that a Marine Expeditionary Unit and amphibious assault ship will arrive in the Middle East on the 27th, coinciding with the so-called “final deadline” set by President Trump for Iran to “open” the Strait of Hormuz.

In addition to the Marine unit, Trump is reportedly also authorized to deploy over 1,000 soldiers from the 82nd Airborne Division to the Middle East. The 82nd Airborne is a rapid response force capable of deploying worldwide within about 18 hours, specializing in parachuting into contested areas for quick missions.

Regarding the confusing information from the U.S. about U.S.-Iran negotiations, former CIA Director John Brennan said he prefers to believe Iran’s account over that of President Trump. “I trust Iran more than our own president.”

(Source: Securities Times)