Asia-Pacific markets traded mixed on Tuesday as a decline in United States technology stocks overnight offset optimism generated by progress in peace talks between the United States and Iran.
Investor sentiment received some support after U.S. Vice President JD Vance said on Monday that discussions between Washington and Tehran had made "great progress" despite periods of tension.
By 11:30 am AEST (1:30 am GMT), Australia's S&P/ASX 200 was up 0.1%, while Japan's Nikkei 225 eased 0.2% after reaching record highs in the previous session. South Korea's KOSPI 200 fell 2.2%.
In South Korea, consumer confidence improved for a second consecutive month, supported by robust export performance and rising share prices despite ongoing inflation concerns.
Expectations for higher residential property prices also climbed to their highest level since January.
According to the latest Consumer Sentiment Survey released by the Bank of Korea, the Composite Consumer Sentiment Index rose to 106.6 in June from 106.1 in May.
The gain followed a 6.9-point increase in the previous month and marked the second consecutive monthly improvement.
Earlier in the session, preliminary purchasing managers' index (PMI) data indicated Australian business activity had stabilised in June. The Flash Australia Services PMI Business Activity Index rose to 49.9 from 48.7 in May, while the Flash Australia Manufacturing PMI increased to 51.2 from 50.7.
The report noted: "Flash PMI® data from S&P Global signalled a near-stabilisation of business activity in Australia during June, following a slight reduction in the previous month. New orders continued to fall, however, amid market uncertainty.
"Meanwhile, business confidence dropped to the lowest since the COVID-19 pandemic. Inflationary pressures remained relatively elevated, but showed further signs of easing from the recent peak seen in April."
Japan's PMI figures also pointed to stronger economic momentum. The Flash Japan Services PMI Business Activity Index rose to 51.8 from 50.0 in May, while the Flash Japan Manufacturing PMI improved to 54.9 from 54.5.
The accompanying report stated: "The latest Flash PMI® data, compiled by S&P Global, pointed to the strongest rise in total business activity across Japan's private sector for three months in June.
"This was supported by a quicker increase in manufacturing output and a renewed upturn in services activity, with both sectors reporting firmer demand conditions. Greater amounts of backlogged work meanwhile encouraged firms to expand their payrolls again.
"However, input costs rose at an accelerated pace that was the fastest since July 2022, which led to another substantial increase in average selling prices.
"Furthermore, concerns around inflation and supply chain disruption due to the war in the Middle East meant that forecasts for the year-ahead remained muted by historical standards."
Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence, commented:
“The June flash PMI data indicated that overall business activity growth across Japan picked up for the first time since the outbreak of war in the Middle East. The expansion in output continued to be led by manufacturers, which recorded one of the strongest rises in output in over a decade.
"Nevertheless, it was also encouraging to see a renewed upturn in service sector activity, with demand conditions improving across both monitored industries.”
Overnight in the United States, markets finished mixed. The Dow Jones Industrial Average gained 0.3%, while the S&P 500 fell 0.4% and the Nasdaq Composite dropped 1.3% as technology stocks came under pressure.
Commodity markets reflected improving geopolitical sentiment. ICE Brent crude fell 3.3% to settle at US$77.90 per barrel, its lowest level since 2 March. Spot gold rose 0.7% to US$4,190.50 per ounce.
In China, equities extended recent gains on Monday. The SSE Composite Index rose 1.8% to 4,163.1, while the CSI 300 climbed 2.4% to 5,059.7, its highest close since 15 December 2021.
Hong Kong's Hang Seng Index fell 0.7% to 23,768.5, touching its lowest level since 7 July. In India, the BSE Sensex added 0.4% to close at 77,094.1.
European markets ended Monday mixed. The UK's FTSE 100 gained 0.7% to 10,437.9, Germany's DAX rose 0.6% to 25,139.7, while France's CAC 40 slipped 0.3% to 8,400.1.
