Asian Markets Mixed as Oil Surge; Stalled US-Iran Talks Weigh on Sentiment

GLOBAL MOOD: Cautiously Risk-Off
Drivers: Diplomacy Setback, US Security Tensions 

Asia Pacific markets opened mixed on Monday as rising oil prices and stalled US–Iran negotiations kept investors cautious ahead of key central bank events. Japan’s Nikkei 225 gained around 0.3%, supported by exporters, while the broader Topix index slipped slightly as traders assessed the inflation impact of higher crude prices. In contrast, Hong Kong’s Hang Seng and Australia’s ASX 200 edged lower amid broader risk-off sentiment.

Oil prices climbed sharply during early Asia trade after Donald Trump cancelled plans to send senior envoys to Pakistan for further Iran talks, while Tehran reiterated it would not negotiate under blockade conditions. Brent crude briefly touched a three-week high above $107 per barrel in early Asian trade, fuelling inflation concerns and reducing expectations for global rate cuts.

Investors are also awaiting this week’s Bank of Japan meeting, where policymakers are expected to keep rates unchanged while monitoring geopolitical risks and energy-driven inflation pressures.

THE BIG STORY
A major security incident in Washington added fresh uncertainty to an already tense geopolitical backdrop after a suspect opened fire at a security checkpoint during the White House Correspondents' Association dinner. US President Donald Trump and senior administration officials were reportedly among the likely targets, according to the acting attorney general. The suspect was arrested after injuring a Secret Service agent, with investigations ongoing into possible motives and any international links.

The incident comes at a sensitive moment for US foreign policy, with peace efforts involving Iran facing another setback. Trump indicated that Iran remains free to reopen negotiations, but the cancellation of planned diplomatic engagement in Pakistan signalled deteriorating momentum in talks. Iranian Foreign Minister Abbas Araqchi reportedly left Islamabad without direct discussions with US representatives, highlighting the widening gap between both sides as ceasefire tensions persist.

At the same time, Trump suggested progress in separate discussions involving Russia and Ukraine, indicating ongoing conversations with both Vladimir Putin and Volodymyr Zelenskiy. The combination of domestic security concerns and unresolved geopolitical conflicts is likely to keep global markets focused on risk management and safe-haven positioning in the near term.

Data Spotlight
The University of Michigan’s Consumer Sentiment Index was revised slightly higher to 49.8 in April 2026 from the preliminary reading of 47.6, but still marked the weakest level on record. Confidence remained deeply pressured across all demographic groups as the economic fallout from the Iran conflict continued to weigh on households. Although a temporary ceasefire and modest easing in gasoline prices helped sentiment recover marginally late in the month, broader concerns around inflation and economic stability persisted.

Inflation expectations rose sharply, with one-year expectations climbing to 4.7% from 3.8%, marking the largest monthly jump in a year. Long-term inflation expectations also increased to 3.5%, the highest since October 2025, highlighting growing concerns that elevated energy costs and broader price pressures could become more persistent.

Takeaway:
US consumers remain highly cautious, with geopolitical tensions and inflation concerns continuing to weigh heavily on confidence and expectations.

WHAT HAPPENED OVERNIGHT

• US stocks hit record highs as Iran talk hopes and chip rally lift sentiment
  • S&P 500 gained 0.80% and Nasdaq surged 1.63% to fresh record closes.
  • Dow Jones slipped 0.16% despite broader strength in technology shares.
  • Optimism around renewed US–Iran negotiations boosted market sentiment.
  • Iranian Foreign Minister Abbas Araqchi expected in Islamabad for talks mediated by Pakistan.
  • Intel surged 23.7% after strong revenue outlook, leading to a semiconductor rally.
  • Nvidia climbed 4.3% to another record close amid continued AI optimism.
  • Investors are increasingly confident about returns from large-scale AI spending by major tech firms.

• US Treasury yield steady but weekly rise reflects inflation concerns
  • The US benchmark 10-year yield holds around 4.32% on Friday.
  • Markets monitor signs of potential breakthrough in US–Iran talks in Islamabad.
  • Donald Trump extends Lebanon ceasefire by three weeks.
  • Traders also assess reports that probe into Fed Chair Jerome Powell is being dropped.
  • Despite stable session, benchmark yield rises ~7 bps for the week.
  • Elevated oil prices and Hormuz disruptions continue to fuel inflation concerns.
  • Markets reassess Fed rate outlook amid persistent geopolitical risks.

• US Dollar pares gain as diplomacy hopes offset safe-haven demand
  • The US dollar index slips below 98.6 after giving up earlier gains.
  • Reports of possible breakthrough in US–Iran talks improve market sentiment.
  • Iranian delegation expected in Islamabad for renewed negotiations.
  • Donald Trump extends Lebanon ceasefire by three weeks.
  • Despite Friday weakness, dollar posts first weekly gain in three weeks.
  • Persistent Hormuz disruptions and elevated oil prices continue to support inflation concerns.
  • Markets reassess Fed rate outlook amid ongoing geopolitical uncertainty.

• Oil ends volatile week higher amid supply risks and diplomacy hopes
  • Brent crude rises 0.3% to $105.33 per barrel, while WTI declines 1.5% to $94.40.
  • Weekly gains remain strong, with Brent up ~16% and WTI rising nearly 13%.
  • Markets continue to balance supply disruption risks against prospects of renewed US–Iran talks.
  • Ongoing uncertainty around Strait of Hormuz keeps geopolitical risk premium elevated.
  • Intraday volatility reflects shifting expectations around ceasefire and negotiation progress.

Day’s Ledger*

Economic Data

• Euro Bonds Auction
• US Bonds Auction 

Corporate Actions

• Jan-Mar Earnings: AU Small Finance Bank, Adani Total, Bajaj Housing, City Union Bank, Coal India, Jindal Saw, Nippon Life, Phoenix Mills, Piramal Finance, SBI Cards, Supreme Ind, UltraTech Cement, Varun Beverages 
• Aanchal Ispat board to consider fund raising
• AU Small Finance Bank board to consider fund raising
• Jayant Infratech board to consider fund raising

Policy

• ECB Schanabel Speech

Tickers to Watch

• UCO Bank Q4 FY26 results: Profit jumps 23% to ₹801 cr, dividend declared
• India Cements Q4FY26 results: Net profit jumps fourfold to ₹59.5 crore
• RBL Bank's Q4 net profit jumps 3.3x on lower provisions, NII grows
• Axis Bank Q4 results: Net profit dips 0.6% to ₹7,071 cr Y-o-Y, NIM up 5%
• IDFC First Bank Q4 FY26 results: Net profit rises 4.9% Y-o-Y to ₹319 crore
• AI adoption to influence salary growth within 2-3 yrs: TeamLease Edtech CEO
• NTPC exploring two nuclear power units of 1,400 MW in Bihar's Banka
• Reliance navigates oil market volatility with diverse sourcing, ops shifts
• CIL plans comprehensive 10-year roadmap to slash 243 MT coal imports
• Adani Green to invest ₹15,000 cr to add 10 GWh battery storage in FY27
• RBI cancels Paytm Payments Bank licence; cites governance lapses
• IDBI Bank disinvestment process to continue: FM Nirmala Sitharaman

Must Read

• US-Iran peace negotiations stall as conflict approaches two-month mark
• Iran sent new offers 10 minutes after US team's Pak trip cancelled: Trump
• Gold, silver may face selling pressure as Fed meeting, US-Iran talks loom
• India, New Zealand to sign FTA on Monday, aim to double bilateral trade
• India EV sales double, mid-market surges as entry segment shrinks
• Trump's renewed crypto push fails to stop his memecoin's deep slide
• Govt may keep retail fertiliser prices unchanged for farmers: FM Sitharaman

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See you tomorrow with another edition of The Morning Edge.

Have a great trading day

𝐀𝐧𝐝𝐡𝐫𝐚'𝐬 𝐃𝐚𝐭𝐚 𝐂𝐞𝐧𝐭𝐫𝐞 𝐏𝐨𝐥𝐢𝐜𝐲: 𝐖𝐡𝐚𝐭'𝐬 𝐍𝐞𝐰, 𝐖𝐡𝐚𝐭'𝐬 𝐌𝐢𝐬𝐬𝐢𝐧𝐠, 𝐖𝐡𝐚𝐭 𝐂𝐚𝐧 𝐁𝐞 𝐅𝐢𝐱𝐞𝐝

Andhra Pradesh’s experiment with letting a technology company act as its own power distributor is bold and quick.

Sharmila Chavaly writes,  but the support infrastructure—water, grid stability, enforcement—needs to catch up fast.

(*Compiled from various media sources)