Asian markets rallied strongly following Wall Street’s best session in nearly a year, as renewed hopes of an imminent end to the Iran war boosted investor sentiment.
South Korea’s Kospi rebounded from earlier losses, surging 8.1% to 5,461.51, while Japan’s Nikkei 225 gained 4.5% to 53,352.96. A survey released by Japan’s central bank on Wednesday also indicated improved business sentiment among major manufacturers, despite ongoing geopolitical concerns.
Elsewhere in the region, Hong Kong’s Hang Seng rose 2% to 25,283.12, and China’s Shanghai Composite advanced 1.4% to 3,946.67. Australia’s S&P/ASX 200 climbed 2% to 9,650.90, Taiwan’s Taiex jumped 4.4%, and India’s Sensex increased 2.2%.
The rally was driven by growing optimism that the five-week Iran conflict could soon de-escalate. Donald Trump said on Tuesday that US military action against Iran could conclude within two to three weeks, adding that the US would not be involved in developments in the Strait of Hormuz thereafter. The White House also confirmed he will deliver a public address on the conflict on Wednesday evening.
Oil markets reacted to the shifting outlook, with prices easing from recent highs. Brent crude rose 0.7% to $104.66 in early trading, after peaking at $119 on Tuesday, while US benchmark crude gained 1.2% to $102.57.
US equities posted sharp gains on Tuesday. The S&P 500 rose 2.9% to 6,528.52, marking its strongest performance since May. The Dow Jones Industrial Average climbed 2.5% to 46,341.51, and the Nasdaq Composite advanced 3.8% to 21,590.63. The rally followed signals from Iran’s president, Masoud Pezeshkian, indicating a willingness to pursue a ceasefire agreement with the United States.
