Asian Equities Rebound; Global Calls for Calm as U.S.-Iran Tensions Rise

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© Reuters. © Reuters. – Asian markets rebounded on Tuesday in Asia as global leaders urged the U.S. and Iran to exercise restraint.

China’s Shanghai Composite and the traded 0.4% and 0.7% higher by 10:40 PM ET (02:40 GMT).

Hong Kong’s Hang Seng Index climbed 0.6%.

Japan’s Nikkei 225 advanced 1.3% even after the country’s service sector recorded its deepest contraction in more than three years in December.

The final seasonally adjusted Jibun Bank Japan Services Purchasing Managers’ Index (PMI) fell to 49.4 in December from 50.3 in November, declining to its lowest level since September 2016.

South Korea’s KOSPI gained 0.7%.

Calm has seemingly returned to global markets today as investors entered a wait-and-see mode.

Sentiment remained cautious however, as the U.S. has ordered additional forces to the Middle East. President Donald Trump said the Islamic Republic will “never have a nuclear weapon”

“Geopolitical tensions remain centre stage with markets clearly in wait-and-see mode,” Tapas Strickland, director of economics and markets at National Australia Bank, wrote in a note on Tuesday.

“The potential for this to spiral into a cycle of retaliation remains and markets will likely remain cautious,” Strickland said, referring to U.S.-Iran tensions.

Down under, Australia’s ASX 200 gained 1.1%. The country’s major dairy industry is set to be affected by ongoing bushfires as affected regions account for around a third of Australia’s output, a Reuters report noted.

Bega Cheese, the country’s largest processor, saw its shares plunged as much as 10% on Monday, before rebounding more than 1% today. It said Monday that its production facilities have not suffered any impact from the fires, but a number of its suppliers were affected.

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