Asian stocks cautious as ceasefire doubts lift oil again

Asian stock markets turned cautious on Thursday as doubts emerged over the durability of the Middle East ceasefire, pushing oil prices higher and renewing concerns about long-term inflation.

Despite a truce between the United States and Iran, there were few signs that the Strait of Hormuz had fully reopened. Iran continues to exert control over the vital shipping lane, with reports suggesting conditions such as tolls for safe passage.

Oil prices rebounded, with US crude rising 2.8 percent to around $97 per barrel and Brent climbing 2.1 percent, reflecting lingering supply risks.

Equity markets lost momentum after strong gains a day earlier. Japan’s Nikkei 225 hovered around flat, while South Korea’s Kospi slipped. Broader regional indices also edged lower, and US futures pointed to a softer opening after Wall Street’s recent rally.

Analysts warn that with oil prices still significantly higher than pre-conflict levels, inflation pressures are likely to intensify globally. Expectations of higher interest rates are also returning, with signals from the Federal Reserve suggesting caution on rate cuts and even the possibility of further tightening.

Currency markets stabilised after earlier volatility, while gold prices remained elevated, reflecting continued uncertainty.

Overall, investors are growing wary that the ceasefire may not bring immediate stability, and that economic fallout from the conflict could persist for months.