Asia-Pacific equities traded mostly higher after Wall Street advanced, with the S&P 500 reaching a new record and the Nasdaq leading gains on tech strength and softer producer price index (PPI) data. The positive momentum on Wall Street carried over to most regional markets, though performance varied across bourses.

Regional market performance

The session saw a divergence across Asia-Pacific indices, with the majority posting gains while Australia's benchmark moved lower. The following table summarises the performance of key regional indices:

Wall Street sets the tone

The overnight session on Wall Street saw the S&P 500 reach a new record, with the Nasdaq outperforming on the strength of technology stocks. Softer PPI data contributed to the positive sentiment, providing a supportive backdrop for equity markets across the Asia-Pacific region. Japan's Nikkei 225 and South Korea's KOSPI both reflected this optimism with notable gains, while Australia's ASX 200 declined 0.62%, standing apart from the broader regional trend.

Asia-Pacific equity markets opened the session in positive territory, tracking strong overnight gains on Wall Street where the S&P 500 and Dow Jones Industrial Average reached new record highs. The Nasdaq led advances, buoyed by broad-based strength in the technology sector. Regional investor sentiment was further supported by falling bond yields and softer oil prices, the latter driven by hopes surrounding a revised Hormuz agreement.

Regional Market Performance

The positive momentum was reflected across major Asia-Pacific indices, with South Korea's KOSPI posting the sharpest gains among the key benchmarks tracked during the session. The following table summarises the performance of the major regional indices:

Key Drivers Behind the Rally

Several factors contributed to the broad-based advance across Asia-Pacific markets during the session:

• Wall Street Records: The S&P 500 and Dow Jones reached new record highs, providing a strong lead for regional markets.
• Technology Strength: The Nasdaq's outperformance, underpinned by gains in the technology sector, reinforced risk appetite among investors.
• Falling Bond Yields: Declining bond yields reduced the opportunity cost of holding equities, supporting broader market participation.
• Softer Oil Prices: Easing crude oil prices, driven by optimism over a potential revised Hormuz agreement, contributed to improved market sentiment.

Broader Market Context

The combination of record-setting performances on Wall Street and easing macroeconomic pressures — including lower bond yields and declining oil prices — created a conducive environment for equity gains across the Asia-Pacific region. The KOSPI's sharp advance of +4.20% stood out as the most notable move among the indices, while Japan's Nikkei 225 also recorded a significant gain of +2.89%. Australia's ASX 200 posted a more modest rise of +0.63%, reflecting a measured response to the prevailing positive sentiment. The hopes tied to a revised Hormuz agreement were cited as a specific catalyst behind the softening in oil prices, which in turn alleviated cost-related concerns for energy-importing economies in the region.