Asian stock markets surged on Wednesday after US President Donald Trump announced that the United States would exit the war with Iran within two to three weeks, with or without a peace deal. The comments raised hopes that the month-long conflict, which has disrupted global energy markets, may soon conclude.
South Korea's Kospi jumped 6.4%, Japan's Nikkei 225 rose 4%, Hong Kong's Hang Seng gained 1.9%, and Taiwan's Taiex climbed 4.3%. Australia's S&P/ASX 200 added 1.7%, while India's BSE Sensex surged more than 1,800 points in early trade, driven by broad-based buying across banking, financials and technology stocks. Despite the gains, both the Nikkei and Kospi remain below pre-war levels.
The rally followed a strong session on Wall Street, where the S&P 500 jumped 2.9% for its largest single-day gain since May. The Nasdaq leaped 3.8% and the Dow Jones Industrial Average surged 2.5%. Trump, speaking from the Oval Office, said Iran was 'begging to make a deal' but that a formal agreement was 'irrelevant' to America's withdrawal timeline. He also told allies to 'go get your own oil' and called on other nations to take control of the Strait of Hormuz.
Analysts cautioned that the remarks had not resolved underlying uncertainties. 'Markets are being pulled in multiple directions by geopolitics and macro fundamentals,' said Lukman Otunuga of FXTM. Oil prices steadied but remained elevated, with Brent crude at $105.48 a barrel and US benchmark crude at $102.73. The price of Brent for May delivery rose by a record 64% in March, the biggest monthly gain since 1990, as Iran threatened to close the Strait of Hormuz.
Gold fell around 14% this month, pressured by a stronger dollar, while the dollar's strength pushed USD/JPY above 160, a level that raises the prospect of intervention. Japan and South Korea, heavily reliant on Middle Eastern energy, have been among the hardest hit economies. Iran reiterated five demands for ending the war, and a third US aircraft carrier strike group is heading to the region. Trump is expected to address the nation on Wednesday evening with an 'important update' on Iran.
Friday's US jobs report will also be closely watched, with payrolls forecast to rebound to 65,000 after a loss of 92,000 in the prior reading. 'With expectations for a modest rebound in payrolls, the outcome could significantly influence Fed rate expectations, especially as rising energy prices complicate the inflation outlook,' Otunuga added.
