Key Takeaways
- Global markets rallied as Brent crude plunged over 5% following reports that a US-Iran peace deal is "largely negotiated," potentially reopening the Strait of Hormuz.
- Japan’s Nikkei 225 (NI225) achieved a historic milestone, surging 3.14% to close at 65,324.90, marking its first-ever finish above the 65,000 level.
- Singapore’s Q1 GDP significantly outperformed expectations, growing 1% quarter-on-quarter, compared to the estimated 0.2%, prompting officials to maintain a steady monetary policy.
- Petronas (PETR) confirmed a tragic maintenance accident at its FSO Sepat facility that resulted in three fatalities, even as broader energy markets faced downward pressure.
- China’s yuan fixing reached its highest level since February 2023, with the central bank setting the mid-point at 6.8318 amid a weakening US Dollar.
Geopolitical Breakthrough Drives Oil Lower
Energy markets experienced a sharp correction on Monday as prospects for a diplomatic breakthrough between the United States and Iran intensified. Brent crude fell more than 5% following comments from President Donald Trump indicating that a deal to end the regional conflict and reopen the Strait of Hormuz is nearing finalization.
The potential reopening of the vital shipping passage is expected to ease global inflationary pressures by restoring stable oil flows. US Secretary of State Marco Rubio confirmed "significant progress" in negotiations, noting that the first stage of the agreement would focus on the full reopening of the strait to commercial shipping.
Asian Equities Hit Record Highs
The geopolitical optimism triggered a massive rally across Asian equity markets, led by a blockbuster performance in Japan. The Nikkei 225 (NI225) jumped 3.14% to a record 65,324.90, while the broader TOPIX (TOPIX) index also reached a new all-time high, advancing 1.22% to 3,939.82.
Investor sentiment was further bolstered by strong gains in Taiwan shares, which climbed more than 2%. US futures also signaled a positive open for Wall Street, with S&P 500 (SPX) and Nasdaq (IXIC) futures rising 0.7% and 1.2% respectively, as the "peace dividend" fueled a rotation back into risk assets.
Singapore GDP Beats Estimates
Singapore’s economy showed unexpected resilience in the first quarter of 2026, with GDP growing 1% on a quarter-on-quarter basis. This figure blew past the 0.2% growth projected by analysts, driven by strong performance in manufacturing and wholesale trade.
A Singapore Central Bank (MAS) official reiterated that the existing monetary policy stance remains "adequate," as economic projections and output gap analysis align with earlier expectations. Despite the positive data, officials warned that global financial conditions remain tight and could weigh on growth later in the year.
Corporate and Commodity Developments
In the corporate sector, Petronas (PETR) reported a fatal incident at the FSO Sepat unit off the coast of Terengganu. The company confirmed that three personnel died during lifeboat maintenance work, and an investigation into the cause is currently underway in coordination with Malaysian authorities.
Meanwhile, South Korea continues its bid for a US$39.6 billion submarine deal with Canada. A South Korean Navy submarine, built by a consortium including Hanwha Ocean (042660) and HD Hyundai Heavy Industries (329180), arrived in Victoria for joint drills to showcase its long-endurance capabilities.
In commodities, China’s coking coal contracts surged 7.97% to 1,266.5 yuan/ton. The spike follows reports of a deadly coal mine explosion in China, which has raised immediate concerns regarding domestic supply stability despite the broader cooling of global energy prices.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.