Asian equities declined on Friday as investor sentiment turned cautious due to uncertainties surrounding the durability of the US–Iran ceasefire agreement and profit-taking after a recent rally. The rally had previously been driven by optimism over a potential resolution to the US–Iran conflict, but doubts resurfaced following reports of ceasefire violations and ongoing tensions in the region [1].
CNN reported that the Lebanese army documented multiple ceasefire violations by Israel after the truce began, with Lebanon accusing Israel of 'some acts of aggression' and intermittent shelling affecting several villages in southern Lebanon. The Lebanese army also advised residents to delay returning to their homes in the south due to these breaches [1].
US President Donald Trump stated on Thursday that he had spoken with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu, and that Israel and Lebanon had agreed to a 10-day ceasefire starting at 5 PM ET. President Trump expressed confidence that the war with Iran would end soon, noting that Tehran had agreed to terms including abandoning its nuclear ambitions and reopening the Strait of Hormuz [1].
Market data showed Japan’s Nikkei 225 trading 1% lower near 58,900, Hong Kong’s Hang Seng Index down over 1.30% to near 26,050, China’s SSE Composite Index losing 0.30% to near 4,050, and South Korea’s Kospi falling 0.42% to near 6,200. The Hang Seng Index also ended its three-day winning streak amid the cautious sentiment, though gains in technology, financial, and consumer sectors were noted due to an improved outlook and stronger global cues [1].
Bank of Japan Governor Kazuo Ueda commented that the central bank must consider Japan’s low real interest rates when setting monetary policy, with markets remaining divided on the possibility of a rate hike later in the month [1].
CONCLUSION
Asian stock markets retreated as doubts over the US–Iran ceasefire and profit-taking weighed on investor sentiment. While some sectors in Hong Kong showed resilience, overall caution prevailed amid geopolitical uncertainties and central bank policy considerations.