Emerging Asian stocks climbed to their highest level in more than six weeks on Wednesday, as hopes for a resumption of U.S.–Iran peace talks boosted demand for riskier assets. Indonesia’s rupiah, however, fell to a fresh record low.
U.S. President Donald Trump said talks with Iran could resume in Pakistan over the next two days, after negotiations over the weekend collapsed and Washington imposed a blockade on Iranian ports.
Signs of renewed diplomatic engagement helped steady markets, pushed oil prices firmly below $100 a barrel, and lifted the MSCI Emerging Asia equity index more than 2% to its highest since March 2. A broader index of global emerging market stocks rose 1.7%, also reaching its highest level since early March.
Glenn Yin, director of research at brokerage ACCM, said regional equities were benefiting from growing bets on a peace deal, as investors reassessed risks around a key global energy chokepoint. Still, he said, a geopolitical risk premium remains.
South Korea’s KOSPI led regional gains, rising as much as 3.6% to its highest level since late February. Stocks in Taipei hit a record high of 37,064.16 points, with Taiwan’s tech-heavy benchmark up more than 10% over the past seven sessions.
Singapore stocks gained as much as 0.6%, touching their highest level since February 23, a day after the local central bank unexpectedly tightened monetary policy. Equities in Manila rose 1%, while Malaysian stocks slipped 0.3%. Thailand’s equity market was closed for a holiday.
The U.S. move to halt maritime trade in and out of Iran weighed on net oil importers in emerging Asia. Indonesia’s rupiah slid to a record low of 17,145 per U.S. dollar and is down nearly 1% over the past five sessions.
The rupiah is “facing structural pressures with persistent outflows from Indonesian bonds and a strong greenback as the key culprits,” Yin said, adding that the U.S. shutdown of Iran’s maritime trade was “another straw on the already fragile rupiah.” About a quarter of Indonesia’s crude oil imports come from the Middle East.
The Philippine peso fell as much as 0.4%, while the Thai baht weakened up to 0.2% to a one-week low. Elsewhere, the Taiwan dollar edged up 0.2%, and the Malaysian ringgit trimmed early gains to trade flat.