Volkswacht Bodensee - Asian equities rally on Mideast optimism, oil edges higher

Investor sentiment strengthened through the session on hopes that diplomatic progress could stabilise energy supplies after weeks of turbulence from the Middle East conflict, even as crude prices ticked higher on the day.

US Secretary of State Marco Rubio said talks to end the war could progress, eyeing help from Pakistani mediators to help strike an agreement.

"I believe the Pakistanis will be travelling to Tehran today. So hopefully that'll advance this further," Rubio told reporters.

President Donald Trump warned on Wednesday that negotiations were on the "borderline" between a deal and renewed strikes.

"If we don't get the right answers, it goes very quickly. We're all ready to go," Trump said.

A ceasefire agreed on April 8 halted weeks of fighting between the US-Israel alliance and Iran, but has yet to produce a lasting peace deal, leaving markets vacillating at every development.

Tehran said it was reviewing US proposals but warned of a "forceful response" to any renewed attack, as both sides exchanged terms under the threat of escalation.

A key sticking point remains the Strait of Hormuz, which remains effectively closed despite the ceasefire and normally transports one-fifth of global energy supplies.

Across Asia, gains broadened into the afternoon. Tokyo's Nikkei 225 closed 2.7 percent ahead at a record high.

Taipei added more than 2.0 percent, fuelled by strength in technology stocks. Taiwanese chip giant TSMC's shares were trading 1.0 percent higher.

Shanghai closed ahead, and Hong extended its early gains. Sydney, Jakarta and Mumbai also advanced, as did Bangkok, Manila, Singapore and Kuala Lumpur, pointing to a region-wide rally.

Oil prices ticked up, with Brent crude above $104 a barrel and US benchmark WTI near $98, both rising on the day.

Analysts said energy and rates dynamics remained central to market direction.

"Markets have treated the continuation of US-Iran dialogue as modestly constructive, even without a clear breakthrough," said Stephen Innes of SPI Asset Management.

"But the bigger story remains higher US yields and persistent inflation pressures, which continue to support the dollar and could eventually challenge equity valuations," he added.

The gains followed a cautiously positive session on Wall Street, where equities edged higher at the close on Wednesday.

Attention also turned to South Korea, where unionised workers at Samsung were poised to begin voting on Friday on a tentative wage deal that has averted a major strike.

The chip giant and its union reached the provisional agreement late Wednesday following last-minute, government-mediated talks, avoiding a planned 18-day strike that was set to begin on Thursday.

The prospective deal introduces a new bonus pool for employees in the semiconductor division, equivalent to 10.5 percent of the division's operating profit, to be paid in stock.

While workers are expected to benefit from the deal, some shareholders have voiced opposition, vowing to pursue legal action against it.

Shares in Samsung Electronics were trading more than 2.3 percent lower on Friday afternoon.

Japanese government data showed core inflation slowed to 1.4 percent in April, coming in below market expectations as Prime Minister Sanae Takaichi rushes to draft an extra budget to offset the impacts of the Middle East war.

In Europe, London, Paris and Frankfurt advanced at the open.

Sentiment on Wall Street has been boosted by Elon Musk's filing for a public sale of SpaceX shares, which could be the largest initial public offering in history as the rocket and satellite company seeks to raise up to $75 billion.

- Key figures at around 0730 GMT -

Brent North Sea Crude: UP 2.3 percent at $104.92 a barrel

West Texas Intermediate: UP 1.7 percent at $98.03 a barrel

Tokyo - Nikkei 225: UP 2.7 percent at 63,339.07 (close)

Hong Kong - Hang Seng Index: UP 0.9 percent at 25,613.95

Shanghai - Composite: UP 0.9 percent at 4,112.90 (close)

London - FTSE 100: UP 0.1 percent at 10,472.70

Euro/dollar: DOWN at 1.1604 from $1.1622 on Thursday

Pound/dollar: DOWN at 1.3418 from $1.3439

Dollar/yen: UP at 159.13 from 158.91 yen

Euro/pound: FLAT at 86.49 from 86.48 pence

New York - DOW: UP 0.6 percent at 50,285.66 points (close)

K.Hofmann--VB