Strong U.S. Economic Data Fuels Asian Equity Rally Despite Rising Oil Prices

This resurgence was primarily driven by robust overnight U.S. economic data, specifically the Institute for Supply Management's services index, which rose to 56.1 in February, comfortably exceeding economists' expectations of 53.5. Commerzbank Research analysts noted that investors interpreted the positive ISM data, coupled with a softer price sub-index, as a sign of U.S. economic resilience amidst geopolitical tensions.

Major Asian indices saw substantial gains, with Japan's Nikkei Stock Average climbing 3.6%, South Korea's Kospi surging approximately 11% (leading to a brief trading suspension to cool volatility), and Singapore's FTSE Straits Times Index adding 0.8%. However, the positive equity sentiment was tempered by rising oil prices, fueled by ongoing concerns over supply disruptions stemming from the Middle East conflict. Front-month West Texas Intermediate crude oil futures increased by 2.8% to $76.75 per barrel, while Brent crude oil futures rose 2.5% to $83.46 a barrel.

Defense Secretary Pete Hegseth's comments suggesting the U.S.-Israel military engagement in Iran could last up to eight weeks underscored the potential for prolonged instability, keeping upward pressure on crude. This creates a mixed market picture where strong economic fundamentals support equities, but geopolitical risks continue to drive commodity inflation.