Asian equities mixed after U.S. strikes temper Middle East optimism; KOSPI defies trend to hit record high

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Asian equities mixed on Tuesday as investors turned cautious following fresh US strikes in southern Iran that heightened geopolitical tensions and pushed oil prices sharply higher.

Gold prices slipped below $4,550 an ounce, paring gains from the previous session.

WTI crude futures climbed toward $92 per barrel, recouping some losses.

The benchmark KOSPI climbed nearly 3% to around 8,050.

Japan's (NKY:IND [https://seekingalpha.com/symbol/NKY:IND]) fell 0.07% to below 65,000, while the broader Topix Index slipped 0.1% to 3,938, with both benchmarks easing from record highs, and the Japanese yen [https://seekingalpha.com/symbol/USD:JPY#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link] steadied near 159 per dollar.

Bank of Japan Deputy Governor Ryozo Himino stated that the central bank plans to increase interest rates, depending on the impact of the Middle East conflict on Japan’s economy and inflation. He noted that real interest rates are still very low.

China's (SHCOMP [https://seekingalpha.com/symbol/SHCOMP]) fell 0.77% to 4,130, while the Shenzhen Component tumbled 1.2% to 15,677, with both benchmarks retreating from the previous session, and the offshore yuan [https://seekingalpha.com/symbol/USD:CNY#source=url_first_level%3Amarket-news%7Csection%3Aglobal%7Csection_asset%3Afull_story%7Cbutton%3Abody_link] weakened to around 6.78 per dollar, retreating from a more-than three-year high reached in the previous session.

Hong Kong (HSI [https://seekingalpha.com/symbol/HSI]) rose 0.14% to around 25,660, as optimism surrounding a potential US-Iran agreement earlier supported Asian equities and weighed on oil prices.

Bucking the broader positive sentiment, market positioning on Xiaomi Corporation turned highly bearish. Short interest on the tech giant climbed to an all-time high as investors grew increasingly jittery over mounting memory manufacturing costs and brutal domestic EV competition.

India (SENSEX [https://seekingalpha.com/symbol/SENSEX]) rose 0.16% at 76,479, after last session’s two-week high. The Indian rupee hovered near 95.4 per dollar.

Australia (AS51 [https://seekingalpha.com/symbol/AS51#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) fell 0.38% to 8,647. The Australian dollar edged lower around $0.71, but stayed near a one-week high.

Wall Street was closed on Monday for the Memorial Day holiday.

U.S. stock futures jumped as Wall Street reopened following a holiday-extended weekend: Dow +0.62%; S&P 500 +0.64%; Nasdaq +0.84%.

Investors are now focusing on a busy week of US economic releases, including PCE inflation and GDP data, alongside earnings reports from Zscaler, Salesforce, and Dell Technologies, among others.

CURRENCIES: (JPY:USD [https://seekingalpha.com/symbol/JPY:USD]), (CNY:USD [https://seekingalpha.com/symbol/CNY:USD]), (AUD:USD [https://seekingalpha.com/symbol/AUD:USD]), (INR:USD [https://seekingalpha.com/symbol/INR:USD]), (HKD:USD [https://seekingalpha.com/symbol/HKD:USD]), (NZD:USD [https://seekingalpha.com/symbol/NZD:USD]).

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