By Ronnie Harui and Kwanwoo Jun


Asian equities advanced Wednesday afternoon, with South Korea's Kospi hitting a record high, bolstered by overnight gains on Wall Street and hopes of easing Middle East tensions.

President Trump said Tuesday evening in a post on Truth Social that "Great Progress has been made toward a Complete and Final Agreement with Representatives of Iran." Trump also said he agreed to pause "Project Freedom," the administration's initiative to move commercial ships through the Strait of Hormuz. He stated the pause will be for a short period and comes following a request from Pakistan and other countries.

In the post, Trump said that the U.S. blockade of Iranian ports would remain in full force, noting that the administration will "see whether or not the agreement can be finalized and signed."

"The pause in 'Project Freedom' suggests Washington wants to give diplomacy room to work," Saxo Markets' Charu Chanana said in an email. "Markets can rally because the immediate risk of a wider confrontation has been pushed back, but the underlying regional risk has clearly not gone away," the chief investment strategist added.

Equity markets across Asia rose, with South Korea's benchmark Kospi surging past 7000 for the first time, driven by gains in chip manufacturers. Index heavyweight Samsung Electronics jumped 14.7% and Nvidia supplier SK Hynix rose 10.3% in afternoon trade. The stock-market regulator briefly halted trading to ease excessive market moves, after the Kospi futures index surged more than 5%. The Kospi was last 6.7% higher at 7404.35.

Hong Kong's Hang Seng Index rose 0.8%, China's Shanghai Composite added 1.3% and Malaysia's FTSE Bursa Malaysia KLCI was 0.6% higher. Markets in Japan are closed for a public holiday. The eMini Nasdaq 100 futures gained 0.7%, the eMini S&P 500 futures advanced 0.3% and the eMini Dow futures were 0.2% higher.

Gold rose in Asia amid easing Middle East tensions following Trump's remarks, with spot gold climbing 2.0% to $4,645.75 an ounce.

Futures contracts linked to gold "have largely tracked inversely to the direction of tensions in the Middle East since prices reached a peak US$5,422/oz in intraday trading on March 2," Commonwealth Bank of Australia's Vivek Dhar said in a research report.

"The main reason that gold futures have traded inversely to Middle East tensions is the market impact of higher oil, [liquefied natural gas], plastic, aluminum, sulphur and fertilizer prices on short-term U.S. inflation and interest rates," the analyst said. "Higher U.S. interest rates reduce the appeal of gold relative to U.S. interest-bearing securities--helping explain why gold has lost ground since the start of the war," Dhar added.

Meanwhile, front-month West Texas Intermediate crude oil futures declined 1.7% to $100.50 a barrel and front-month Brent crude oil futures fell 1.6% to $108.07 a barrel, ICE data showed.


Write to Ronnie Harui at ronnie.harui@wsj.com and Kwanwoo Jun at kwanwoo.jun@wsj.com


(END) Dow Jones Newswires

05-06-26 0103ET