Asian markets rise on Japan GDP growth as Middle East tensions weigh on Europe

Asian stock markets closed higher on Monday as investors reacted to Japan’s economic data and semiconductor gains. The Nikkei 225 rose 0.74% following reports that Japan’s GDP grew at an annualized rate of 1.1% in the second quarter. In Hong Kong, the Hang Seng advanced, while China’s Shanghai Composite and Shenzhen Composite also saw gains, bolstered by a rally in AI-related semiconductor stocks. Notably, Alibaba Group shares rose after the company sold its gaming division, Lingxi Games, for over $1.5 billion.

In contrast, European markets faced downward pressure due to escalating geopolitical tensions in the Middle East. The STOXX Europe 600 fell, marking a multi-session decline as fears grew regarding the conflict between the United States and Iran. The collapse of ceasefire negotiations and reports of a shift toward offensive military postures have increased concerns over regional energy infrastructure and maritime routes in the Persian Gulf.

Oil prices responded to the instability, with Brent crude rising toward $91 per barrel. The heightened geopolitical risk and rising energy costs are fueling concerns about renewed inflation in Europe, potentially complicating future interest rate decisions by central banks.