Asian stock markets opened mixed on Monday as investors weighed a weaker-than-expected Japanese growth reading against continued geopolitical risks in the Middle East. Japan's Nikkei 225 rose 0.38%, while Australia's ASX 200 fell 0.37%. South Korean markets were closed for a holiday.
Japan's economy expanded at an annualised 1.1% in the second quarter, below the 2% growth economists had expected. The pace also slowed from 2.1% in the previous quarter, with weaker domestic demand offsetting stronger exports.
The latest figures mark the first full quarter to reflect the impact of the Iran conflict, which has pushed energy costs higher for households and businesses. The slowdown also kept the yen in focus, with the currency trading stronger after Japan's economic data.
Oil prices held broadly steady after a strong run last week as renewed fighting in Lebanon and attacks on vessels in the Strait of Hormuz clouded the outlook for a broader US-Iran settlement. Brent crude traded below $89 a barrel after gaining about 6% last week, while West Texas Intermediate hovered around $82.
The latest developments have added uncertainty to already stalled negotiations between Washington and Tehran. The two sides are nearing the formal end of their ceasefire, with no clear progress on reopening the Strait of Hormuz. The US is also preparing an "economic isolation" plan for Iran.
The situation was further complicated by fighting in Lebanon. Israel said it had killed 11 people, including a senior Hezbollah commander, in strikes on southern Lebanon, marking one of the deadliest episodes of fighting there in months.
Wall Street provided a positive backdrop despite the geopolitical uncertainty. The S&P 500 recorded its third consecutive weekly gain and reached another all-time high last week, helped by a strong earnings season. The benchmark nevertheless ended Friday lower as signs of weaker US consumer spending emerged.
US stock futures were little changed in early Asian trading. Dow Jones Industrial Average futures rose 11 points, or 0.02%, while S&P 500 futures gained 0.1% and Nasdaq-100 futures advanced 0.2%.
Gold also moved higher, gaining 0.4% to around $4,390 an ounce, as investors continued to assess geopolitical risks and the outlook for global markets.
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