Asian stocks rally, oil declines

South Korea’s share market rebounded 7%, Nikkei firmed 2.1%, while Chinese blue chips advanced 0.9%

Asian stock markets rallied on Tuesday and oil prices fell ​back after Israel and Iran said they would halt attacks on each other for now, while ever-hopeful investors bought the latest ‌dip in semiconductor stocks.

Analysts cautioned the bounce was narrowly based with 60% of the S&P 500 finishing in the red overnight even as the overall index edged up. Share futures for U.S. stock market did edge up in early trade, but European futures slid.

Higher bond yields continued to test stretched equity valuations, with shipping through the Strait ​of Hormuz still badly restricted.

Inflation remains sticky enough that 46 of 68 global central banks are overshooting targets, which helps explain ​why bond markets are repricing for tighter policy, and why long-duration assets, private credit, and several EM currencies are ⁠struggling, analysts at BofA said in a note.

Our Global Breadth Rule shows nearly half of equity markets already overbought, led by Korea, Taiwan ​and Finland, they said.

South Korea’s share market rebounded 7%, having dipped more than 8% on Monday after a run of spectacular gains left valuations stretched and retail ​investors with extended margin positions.

Nikkei firmed 2.1%, after losing 3.9% the previous session, while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 3.0%.

Chinese blue chips advanced 0.9% as trade data showed exports rose 19% in May and imports jumped 27%, with both beating median forecasts. The strength shows China’s success in finding new markets in ​the face of U.S. tariffs and other trade hurdles, even as domestic demand struggles.