Asia rebound after sell-off: Tokyo and Seoul lead the recovery

Tokyo led the rebound. The Nikkei 225 ended the session up around 2.7%, supported both by the decline in energy prices - positive for a country heavily dependent on oil imports - and by the upward revision of Japan’s gross domestic product, which strengthened expectations for the domestic economy.

An even stronger recovery was recorded in South Korea. Seoul’s Kospi surged by more than 5%, recovering part of the steep losses suffered in the previous session, when the market had been hit by a wave of selling triggered by escalating geopolitical tensions and rising crude prices. The rebound was mainly driven by the technology sector and semiconductor stocks, a traditional engine of the South Korean market.

Hong Kong also finished in positive territory, with the Hang Seng index gaining about 2.1%, supported by a recovery in technology and internet stocks after recent declines. The performance of mainland China was more restrained: the Shanghai Composite closed the session up around 0.6%, reflecting a more cautious stance among investors.

The main factor behind the rebound in Asian markets was the easing of fears related to the conflict in the Middle East. Comments from U.S. President Donald Trump suggesting the possibility that the conflict with Iran could end relatively soon helped ease pressure on energy markets. At the same time, oil prices recorded a significant correction after the sharp increases seen in previous sessions, reducing concerns about a new energy shock for Asian economies.

Investor sentiment was also supported by relatively positive macroeconomic data. In China, exports in the first months of the year proved stronger than expected, while in Japan the upward revision of economic growth strengthened expectations about the resilience of domestic demand. Despite today’s recovery, analysts urge caution. The evolution of the geopolitical crisis remains the main risk factor for global markets and could continue to generate high volatility across financial markets in the coming sessions.

Andrea Pelucchi