Asian markets gain on energy rally, conflict fears persist

April 20, 2026 (MLN): Asian markets traded mostly in positive territory on Monday, even as investors remained wary of escalating geopolitical tensions in the Middle East following a sharp confrontation between the United States and Iran.

According to statements by Donald Trump, a U.S. Navy guided missile destroyer intercepted and disabled an Iranian-flagged cargo vessel in the Gulf of Oman on Sunday, as reported by CNBC.

The ship was later boarded and seized by U.S. Marines, marking a significant escalation in the ongoing maritime standoff.

The development follows reports that Iran had earlier targeted commercial ships attempting to pass through the strategically critical Strait of Hormuz, a key global oil transit route linking the Persian Gulf with the Gulf of Oman.

The situation has intensified further as the United States continues its naval blockade on vessels accessing Iranian ports.

Tehran has condemned the blockade as a violation of a previously agreed ceasefire, and in response, has withdrawn from planned negotiations that were expected to take place in Islamabad.

In a strong warning, Trump stated that Washington could target critical infrastructure in Iran if diplomatic conditions are not met.

Oil markets reacted sharply to the rising tensions, with prices climbing before trimming some gains.

West Texas Intermediate crude futures rose 6.14% to $89 per barrel, while Brent crude advanced 5.51% to $95.36 per barrel, showing concerns over potential supply disruptions in the region.

Despite geopolitical uncertainty, several regional equity markets posted gains. South Korea’s Kospi climbed 1.19%, supported by strong performance in technology stocks. Chipmaker SK Hynix surged more than 3% after announcing mass production of next-generation AI server memory tailored for Nvidia’s Vera Rubin platform.

In Japan, the Nikkei 225 rose 0.88%, while the broader Topix gained 0.63%. Australia’s S&P/ASX 200 remained largely unchanged.

Chinese markets showed mixed performance, with the CSI 300 edging slightly lower, while Hong Kong’s Hang Seng Index posted a modest gain of 0.22%.

On the macroeconomic front, China opted to keep its benchmark lending rates unchanged for the 11th consecutive month.

The decision comes as rising energy costs linked to Middle East instability cloud the country’s growth outlook. Despite this, China reported stronger-than-expected economic growth of 5% in the first quarter, up from 4.5% in the previous quarter.

However, authorities have set a more conservative full-year growth target of 4.5% to 5% for 2026, marking the lowest target range since the 1990s.

Meanwhile, U.S. stock futures declined in early trading hours. Futures linked to the Dow Jones Industrial Average dropped 425 points, or 0.9%, while S&P 500 futures fell 0.8%, and Nasdaq-100 futures slipped 0.65%.

This comes after a strong session on Friday, where the S&P 500 surged 1.2% to close at a record 7,126.06, crossing the 7,100 mark for the first time.

The Nasdaq Composite gained 1.52%, extending its winning streak to 13 consecutive sessions its longest run since 1992 highlighting continued momentum in global equities despite mounting geopolitical risks.

Overall, while equity markets in Asia showed resilience, heightened geopolitical tensions and volatility in oil prices are likely to keep investor sentiment cautious in the near term.

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