Nikkei and Kospi rally, while Hong Kong and Shanghai retreat after US-Iran breakthrough

Tokyo and Seoul lead gains on falling oil prices and technology stocks, while Chinese markets remain weighed down by economic concerns

Nikkei and Kospi Lead Regional Gains

Asian equity markets closed with mixed performances on June 18, 2026, as investors reacted to geopolitical developments in the Middle East and reassessed the outlook for global monetary policy.


Japan's Nikkei 225 led regional gains, ending the session at 71,053.49 points, up 1.65% and marking a fresh record high. South Korea's Kospi also posted a strong performance, advancing 2.3% as investors increased exposure to technology stocks and semiconductor manufacturers. Several factors supported the positive sentiment across the region:


  1. A sharp decline in crude oil prices;
  2. Improved market confidence following the preliminary agreement between the United States and Iran;
  3. Continued demand for artificial intelligence and semiconductor-related stocks;
  4. Expectations of easing inflationary pressures in energy-importing economies.


Technology-heavy markets benefited the most from renewed investor appetite for growth sectors, particularly companies linked to the ongoing expansion of the global AI industry.


Hong Kong and Shanghai End Lower

Chinese equity markets moved in the opposite direction. Hong Kong's Hang Seng Index closed down 1.59% at 23,924.81 points, while the Shanghai Composite Index fell 0.43% to 4,090.48 points. The weaker performance reflected several ongoing concerns surrounding China's economic outlook:


  1. Uneven domestic growth momentum;
  2. Persistent challenges in the property sector;
  3. Profit-taking following recent market gains;
  4. Continued caution among international investors toward Chinese assets.


Despite the support measures introduced by Beijing in recent months, investors continue to seek stronger evidence of a sustained recovery in domestic demand and private-sector investment.


Geopolitics and Oil Prices Drive Market Sentiment

The main catalyst for Thursday's trading session was the improvement in the geopolitical environment in the Middle East. The preliminary agreement reached between Washington and Tehran fueled expectations of a gradual normalization of energy flows through the Strait of Hormuz, one of the world's most critical oil shipping routes.


Prospects for increased Iranian oil exports triggered a decline in crude prices, helping to ease concerns about renewed global inflationary pressures. This development particularly benefited Japan and South Korea, both of which rely heavily on imported energy. Investors also remained focused on several key macroeconomic themes:


  1. Future guidance from the US Federal Reserve;
  2. The policy outlook of the Bank of Japan;
  3. The impact of energy prices on global inflation;
  4. China's medium-term growth prospects.


Overall, the June 18 session highlighted renewed risk appetite in Asia's technology-oriented markets, while Chinese equities continued to face headwinds linked to domestic economic uncertainties.