Global stock markets traded mixed on Tuesday as investors balanced hopes for potential U.S.-Iran peace talks against escalating geopolitical tensions in the Middle East and Ukraine. While South Korea’s Kospi surged to fresh record highs, European equities moved lower after a strong rally in the previous session, with oil markets also showing sharp divergence.
Middle East Tensions and US-Iran Talks Drive Market Sentiment
Investor sentiment initially improved after U.S. President Donald Trump said on TruthSocial that negotiations with Iran were “proceeding nicely,” raising hopes for a possible peace agreement.
Despite the optimistic tone, tensions in the region remained elevated. The U.S. Central Command carried out what it described as “self-defense strikes” against Iranian missile launch sites and vessels attempting to lay mines in southern Iran.
Speaking at the UBS Asian Investment Conference, former CIA Director David Petraeus said Tehran appeared to be “blinking” over its position on the Strait of Hormuz, a key global shipping route. U.S. Secretary of State Marco Rubio, speaking from India, added that the strait would need to be reopened “one way or the other.”
Markets were also monitoring developments in Ukraine. Russian Foreign Minister Sergei Lavrov reportedly warned Rubio to evacuate American diplomats and citizens from Kyiv ahead of planned “systematic strikes” on the Ukrainian capital following recent weekend attacks.
Oil Prices Diverge as Traders React to Geopolitical Risks
Oil markets reacted sharply to the latest geopolitical headlines as trading resumed after the U.S. Memorial Day holiday.
- Brent Crude for July delivery climbed between 2.78% and 3.1%, trading around $98.81 to $99.14 per barrel.
- West Texas Intermediate (WTI) for July delivery fell between 4.2% and 4.42%, dropping to roughly $92.33 to $92.48 per barrel.
The divergence highlighted ongoing uncertainty surrounding global supply risks and regional stability.
Asian Markets Rally Led by South Korea’s Kospi
Asian markets delivered mixed performances across the region, with South Korea leading gains.
South Korea’s Kospi jumped 2.55% to close at 8,047.51 after reaching a record intraday high of 8,131.15 as investors welcomed signs of progress in U.S.-Iran negotiations. The small-cap Kosdaq index also rose 0.98%.
In Japan, the Nikkei 225 slipped 0.25% to 64,996.09 following profit-taking after Monday’s historic session, when the index crossed the 65,000 mark for the first time. The broader Topix index ended slightly lower.
Bank of Japan Deputy Governor Ryozo Himino said policymakers remained cautious about the timing of future interest rate hikes while monitoring developments in the Middle East.
Elsewhere in Asia:
- China’s CSI 300 gained 0.53%
- Hong Kong’s Hang Seng traded flat
- India’s Nifty 50 and BSE Sensex fell 0.23% and 0.28% respectively
European Stocks Edge Lower After Strong Gains
European equities moved modestly lower on Tuesday morning after posting strong gains in the previous session.
The pan-European Stoxx 600 declined 0.2% shortly after 8:30 a.m. in London, following Monday’s 1.04% rally that pushed the index to its highest closing level in more than 10 months.
FTSE 100 Outperforms
London’s FTSE 100 bucked the broader regional trend, rising 0.6% thanks to gains in mining stocks. The move came after U.K. markets reopened from Monday’s late spring bank holiday.
Continental Europe Pulls Back
Major continental benchmarks moved lower after strong advances on Monday:
- Germany’s DAX had previously surged 2.01%
- France’s CAC 40 gained 1.76%
- Italy’s FTSE MIB advanced 1.43%
Corporate Movers: Ferrari Falls While Kingfisher Surges
Corporate earnings and company-specific developments also drove market action across Europe.
Ferrari Shares Drop After EV Launch
Luxury automaker Ferrari fell more than 6% after officially unveiling its first fully electric vehicle, the Ferrari Luce, on Tuesday.
Kingfisher Reaffirms Full-Year Guidance
Home improvement retailer Kingfisher, which owns B&Q, Screwfix, Castorama, and Brico Dépôt, climbed 4.6% to become the top performer on the Stoxx 600.
The company reported a modest 0.7% decline in like-for-like first-quarter sales but maintained its full-year financial guidance, reassuring investors.