Asian stocks drop after Iran-U.S. reach no consensus

KOSPI and Nikkei 225 indexes were the worst performers in Asia, losing more than 1% apiece

Asian stocks dropped on Monday after weekend talks between the U.S. and Iran reached no consensus.

Asian stocks were spooked by a rebound in oil prices following the weekend developments, with Brent climbing 8% and back above the $100/barrel level on Monday. A reported U.S. plan to blockade in Hormuz points to continued disruptions in oil and gas supplies to Asia.

KOSPI and Nikkei 225 indexes were the worst performers in Asia, losing more than 1% apiece. TOPIX index dropped 0.3%.

ASX 200 declined 0.5%, while Straits Times index dropped 0.3%.

Chinese stocks were somewhat resilient, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes moving in a flat-to-low range. But Hang Seng index slipped 1.2%, pressured by losses in technology stocks.

Marathon talks between Iran and the U.S. failed to yield a meaningful de-escalation in their war.

We enter week seven of the US–Iran war with ceasefire now looking fragile. With Brent breaking back above USD100/bbl on renewed escalation risk, equities are the obvious weak link: they have rebounded the most, while bonds have retraced the least, OCBC analysts said in a note.

Asian equities had logged strong gains last week on news of the ceasefire talks. But they now appeared at risk of reversing said gains, especially if the Iran-U.S. war showed no signs of abating.

TSMC shares declined slightly in Taiwan trade on Monday, after the world’s largest contract chipmaker logged stronger-than-expected revenue for the first quarter.

TSMC’s revenue climbed 35% to T$1.13 trillion in the March quarter, more than expectations of T$1.12 trillion, as the company benefited from outsized demand in the artificial intelligence industry.

The chipmaker, which is considered as a bellwether for chips and AI demand, is set to report its full Q1 earnings later in the week.