Asian stock markets mostly moved higher on Monday while oil prices fell sharply following remarks from US President Donald Trump suggesting that negotiations aimed at ending the conflict involving Iran were making progress.Investor sentiment improved on expectations that easing geopolitical tensions could stabilise energy supplies and reduce market volatility.In early trading, Japan’s Nikkei 225 surged by around 3.1%, reflecting strong buying activity.Australia’s S&P/ASX 200 also posted gains of approximately 0.4%, while the Shanghai Composite edged up by 0.4%.Markets in South Korea and Hong Kong were closed for a public holiday marking Buddha’s birthday, limiting regional trading volume.US markets were also shut for Memorial Day.Trump stated that discussions with Iran were proceeding in an orderly and constructive manner.

According to regional reports, negotiations could lead to a potential agreement that may include the reopening of the Strait of Hormuz and Iran reducing its stockpile of highly enriched uranium.

Such developments are viewed as significant for global oil supply chains, as the Strait of Hormuz is a critical route for crude exports from the Persian Gulf.Oil prices reacted strongly to the prospect of improved supply conditions.US benchmark crude fell by more than $4 per barrel, while Brent crude also recorded a similar decline.Analysts noted a shift in sentiment, with markets moving away from geopolitical risk pricing towards expectations of a so-called peace dividend.In currency markets, the US dollar weakened slightly against the Japanese yen and the euro strengthened modestly.

The previous week on Wall Street had ended positively, with major indices extending their winning streak despite concerns over inflation and elevated bond yields.Overall, investor focus has shifted towards geopolitical developments and their potential impact on global energy markets.