Berliner Boersenzeitung - Tokyo record leads stocks higher as Iran peace hopes grow

The gains tracked Wall Street, which also saw all-time peaks as investors were cheered by healthy earnings that indicated the US economy remained resilient despite surging oil prices and rising inflation.

With the Middle East crisis approaching its seventh week, officials from Washington and Tehran were said to be set for a second round of peace talks in Islamabad.

However, that came as Iran also threatened to shut down the Red Sea, along with the Gulf and Sea of Oman, unless the United States lifted a naval blockade of its ports put in place by President Donald Trump following the failure of negotiations last weekend.

White House Press Secretary Karoline Leavitt told reporters further talks "would very likely" be in the Pakistani capital. "Those discussions are being had," she said, adding that "we feel good about the prospects of a deal".

US Vice President JD Vance, who led the first round of talks, said Iran is being offered a "grand bargain" to end the conflict.

A Pakistani delegation arrived in Tehran with a new message from Washington after Trump indicated negotiations could resume this week.

A spokesman at Iran's foreign ministry said "several messages" had been exchanged via Islamabad since talks finished Sunday.

That came as IMF boss Kristalina Georgieva warned of "tough times ahead" for the global economy if the war is not resolved and oil prices remain elevated, adding that inflation risks could seep into food prices.

Still, data on Thursday showed China's economy, the world's second-biggest, grew a forecast-beating 5.0 percent in the first three months of the year.

US investors welcomed the news with open arms, with the S&P 500 ending above 7,000 points for the first time and the Nasdaq closing higher than 24,000 for the first time.

Tokyo and Seoul again led the rally in Asia, with Japan's Nikkei hitting a fresh record, as traders poured back into the AI-based tech investments that had helped send the markets surging before war broke out on February 28.

In a sign of the still-strong demand for artificial intelligence, Taiwanese chip manufacturer TSMC said Thursday first-quarter net profit hit a fresh quarterly record of US$18 billion, far outpacing estimates.

Hong Kong, Shanghai and Taipei gained along with London, Paris and Frankfurt.

Still, Singapore, Sydney, Mumbai and Jakarta dipped. Manila was flat.

Trump also said the leaders of Israel and Lebabon would talk Thursday, boosting hopes for an end to a conflict some fear could unravel the US-Iran ceasefire.

Lebanon was drawn into the broader war when Hezbollah attacked Israel in support of Iran, its key ally, triggering an Israeli ground invasion.

Oil prices edged up but held well below $100 a barrel as traders await the reopening of the key Strait of Hormuz, through which a fifth of oil and gas passes and has been effectively shut by Iran.

"The markets have already shaken hands, even though the diplomats are still arguing over the wording of the peace treaty," wrote Stephen Innes at SPI Asset Management.

"The shift is profound. What began as hope has hardened into something far more constructive and far more directional.

"Hope has given way to a bright, beaming light at the end of the peace tunnel. The market is no longer asking whether there will be a deal. It is trading as if the deal is already signed, sealed, and quietly filed away."

The upbeat mood has also been helped by healthy earnings from large US banks that attested to resilience among US businesses and customers in the face of the Middle East crisis.

There appeared little major reaction to Trump's renewed threat to sack Federal Reserve boss Jerome Powell if he stays beyond his mandate on May 15.

The central banker said last month he would not leave his post as a Fed governor until a Justice Department investigation involving him is "well and truly over, with transparency and finality".

- Key figures at 0715 GMT -

West Texas Intermediate: UP 0.3 percent at $91.56 a barrel

Brent North Sea Crude: UP 0.1 percent at $95.06 a barrel

Tokyo - Nikkei 225: UP 2.4 percent at 59,518.34 (close)

Hong Kong - Hang Seng Index: UP 1.5 percent at 26,333.51

Shanghai - Composite: UP 0.7 percent at 4,055.55 (close)

London - FTSE 100: DOWN 0.2 percent at 10,578.05

Euro/dollar: UP at $1.1803 from $1.1801 on Wednesday

Pound/dollar: UP at $1.3578 from $1.3570

Dollar/yen: DOWN at 158.79 yen from 158.97 yen

Euro/pound: DOWN at 86.92 pence from 86.95 pence

New York - Dow Jones: DOWN 0.2 percent at 48,463.72 (close)

(T.Burkhard--BBZ)