Asian stocks extend gains as oil retreats from recent highs

Oil had surged close to $120 a barrel amid fears that shipping through the Strait of Hormuz would remain disrupted

Most Asian stock markets extended modest gains on Wednesday as oil prices pulled back from recent highs, although investors remained cautious amid ongoing geopolitical tensions.

Equities edged higher after a volatile start to the week triggered by sharp swings in global energy markets. Investors took some comfort from a decline in crude prices, which had soared earlier in the week on fears over the escalating war involving the U.S., Israel and Iran.

A Wall Street Journal report said the International Energy Agency had proposed the largest ever release of oil from strategic reserves to help calm markets and offset supply disruptions caused by the conflict.

Oil had surged close to $120 a barrel amid fears that shipping through the Strait of Hormuz would remain disrupted.

In China, the Shanghai Composite traded flat, while the Shanghai Shenzhen CSI 300 index added 0.5 per cent. Hang Seng ticked 0.3 per cent higher.

Nikkei 225 gained more than 2 per cent on Wednesday, while the broader TOPIX index added 1.7 per cent.

KOSPI climbed almost 4 per cent after jumping more than 5 per cent in the previous session.

S&P/ASX 200 advanced 0.4 per cent, while Straits Times Index edged down 0.3 per cent.

Despite the retreat in crude, investor sentiment across Asian markets remained cautious, as there were still few signs that geopolitical tensions in the Middle East were easing meaningfully.

The earlier spike in oil prices has also heightened concerns about inflation risks globally, particularly for Asian economies that rely heavily on imported energy.