Asian stocks rebound strongly despite Middle East tensions

Asian stock markets bounced back on Thursday after suffering steep losses over the past three trading days. The recovery appears to be driven by value buying following sharp declines linked to the ongoing Middle East conflict.

South Korea’s KOSPI led the rally with a 12% gain, while Japan’s Nikkei 225 rose 2.45%, Shanghai Composite climbed nearly 1%, and India’s Nifty50 gained 0.75%.

The rebound may be temporary, however, as Iran has stated it has not initiated talks to end the conflict with the United States and Israel, signaling preparations for a prolonged war. A Tehran official told Tasnim that “no message has been sent from Iran to the US, nor will any response be given to US messages.”

This follows a report by the New York Times indicating that Iran’s Ministry of Intelligence had indirectly contacted the CIA with an offer to discuss terms for ending the hostilities.

Asian markets had suffered heavy losses in recent days as the conflict pushed oil prices higher, raising concerns about inflation and reduced household purchasing power.

In China, optimism around equities was bolstered by Premier Li Qiang’s statement at the National People’s Congress, pledging to maintain moderately loose monetary policy and fiscal stimulus to support economic growth. China has lowered its growth target for this year to 4.5%-5%, down from 5% achieved last year.