Asia-Pacific markets opened lower on Tuesday as investors assessed fresh uncertainty surrounding United States-Iran peace negotiations, even as Wall Street indices pushed to new record highs in the previous session on continued strength in technology stocks.
By 11:20 am AEST (1:20 am GMT), Australia’s S&P/ASX 200 fell 1.1%, Japan’s Nikkei 225 declined 0.9%, and South Korea’s KOSPI 200 dropped 1.4%.
In economic data, South Korea's consumer price index (CPI) accelerated in May to a more than two-year high, coming in above expectations as elevated oil prices linked to Middle East tensions filtered through to consumer costs.
The consumer price index rose 3.1% from a year earlier, its fastest pace since March 2024, after increasing 2.6% in April, according to the Ministry of Data and Statistics.
The reading exceeded market expectations of a 3.0% rise.
The stronger inflation print reinforces expectations that the Bank of Korea may continue tightening policy in the coming months to contain price pressures and support the won.
Last week, the central bank held its benchmark interest rate steady, but a more hawkish split among policymakers signalled a potential shift towards tighter policy ahead.
The Bank of Korea also raised its inflation forecast for the year to 2.7%, up from 2.2%, amid concerns about persistent price pressures.
The central bank, which targets inflation at 2% over the medium term, next meets on 16 July.
Meanwhile, Australia’s current account deficit widened more than expected in the March quarter of 2026, as weaker exports and stronger imports weighed on the trade balance, according to data released by the Australian Bureau of Statistics (ABS).
The current account balance recorded a deficit of A$27.1 billion in seasonally adjusted terms, compared with market expectations for a $23 billion shortfall.
Exports of goods and services fell 1.2% over the quarter, driven by a 1.2% decline in goods exports, while imports of goods and services rose 0.8%, led by a 1.5% increase in goods imports. The rise in imports was supported by demand for ADP equipment, fuels and lubricants.
Jonathon Khoo, ABS head of international statistics, noted: “Trade in goods and services fell into a deficit for the first time since December quarter 2017, with exports of mining commodities falling and imports of data centre equipment and fuels rising.”
The release also noted that “the $5.2 billion fall in net trade (chain volume measures, seasonally adjusted) is expected to detract 0.8 percentage points from the March quarter 2026 Gross Domestic Product (GDP) movement”.
In a separate release, the ABS reported that building approvals fell in April, signalling a softening in housing construction activity after recent volatility.
Total dwellings approved dropped 3.4% to 16,710 in seasonally adjusted terms, compared with expectations for a 1.5% decline.
Daniel Rossi, ABS head of construction statistics, said the monthly fall was driven primarily by weakness in higher-density housing approvals.
“The fall in total dwellings approved was driven by a 3.6% fall in private dwellings excluding houses, after falling 25.7% in March,” he said.
“Private sector house approvals fell 1.0%, but remain at elevated levels. This is the third consecutive month with over 10,000 private sector houses approved. The last time this occurred was during the final three months of 2021.”
Despite the monthly decline, dwelling approvals remain 10.2% higher on a year-on-year basis, indicating resilience in parts of the housing construction sector even as monthly conditions fluctuate.
On Wall Street, major U.S. benchmarks extended their record run on Monday, with the Dow Jones Industrial Average rising 0.1%, the S&P 500 gaining 0.3%, and the Nasdaq Composite advancing 0.4%.
In commodities, Brent crude climbed 4.2% to settle at US$94.98 per barrel, while spot gold fell 1.3% to US$4,484.53 per ounce.
In China, the SSE Composite Index fell 0.3% to 4,057.7, closing at its lowest level since 20 April, while the CSI 300 dropped 1.0% to 4,844.3.
Hong Kong’s Hang Seng Index added 0.9% to 25,398.2, while India’s BSE Sensex declined 0.7% to 74,267.3, marking its weakest close since 7 April.
In Europe, markets finished lower on Monday. The UK’s FTSE 100 slipped 0.7% to 10,339.0, Germany’s DAX eased 0.4% to 25,003.0, and France’s CAC 40 lost 0.5% to 8,146.6.
