Asian shares gain on Iran war likely nearing an end

Asian shares extended their rebound on investor optimism that the Iran war is likely nearing an end. Oil prices declined.

Shares in Japan and South Korea opened lower, resulting in the broader MSCI Asia Pacific Index going up 0.5%.

Asian shares followed the S&P 500 Index which increased 0.7% on Wednesday and the Nasdaq 100 which gained 1.2% on expectations that the end of the war would improve crude oil flows from West Asia and support economic growth.

Brent crude declined over 1% and was trading around $100 a barrel, while an index of the dollar declined 0.1%.

The broadly risk-on moves reflected easing concerns over a prolonged West Asia conflict, which has roiled financial markets and pushed several equity gauges into correction territory over the past five weeks. Investor focus will turn to President Donald Trump’s address to the nation at 9 p.m. Eastern Time, as confidence builds that the US may soon scale back its military action against Iran and help ease geopolitical tensions.

In other corners of the market, gold built on its gains to trade just under $4,800 an ounce. Treasuries registered a lumpy session with the 10-year ending Wednesday little changed, its 30-year equivalent rallying and the two-year edging lower following solid data on the US labor market and retail sales.

Trump is scheduled to deliver a rare prime-time address even as the Strait of Hormuz remains largely closed. The US leader is expected to hail his military campaign in Iran as a success and stress that the conclusion of operations may come in two to three weeks, according to a White House official.

Hours ahead of that speech, the Iranian president took the unusual step of issuing a letter addressed to Americans, arguing that his country has no enmity with the US and has acted in self-defense. He warned that “continuing along the path of confrontation is more costly and futile than ever before” and noted that attacks on infrastructure directly target the Iranian people.

Trump said on Wednesday that Iran has asked for a ceasefire, adding that the US would only consider it if the Strait of Hormuz was reopened. Iran’s foreign ministry said the claim of a ceasefire request was “false and baseless,” according to state TV.

The latest back-and-forth follows separate comments from Trump on Tuesday when the president said he foresaw the US ending the conflict within two to three weeks, sparking a sharp rally in stocks.

Elsewhere, tariff concerns resurfaced as the Trump administration prepares a 25% levy on finished goods made with imported steel and aluminum, according to the Wall Street Journal.

With inputs from Bloomberg

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