Stocks Fall, Oil Rises on Trump-Iran Tensions
Asian equities mostly declined on Friday while oil prices extended gains after former US President Donald Trump escalated tensions with Iran, hinting at possible military action if nuclear talks fail.
Trump, speaking at the inaugural meeting of the “Board of Peace,” warned that Tehran must make a “meaningful deal” or face consequences. He indicated that Washington could take further steps within the next 10 days, as US military assets were deployed to the Middle East.
The remarks heightened geopolitical concerns and dampened a tentative rebound in global markets following a recent AI-driven sell-off. Investors are also awaiting fresh US economic data expected later in the day, which could influence expectations for future interest rate cuts.
Oil prices climbed to their highest levels since June on fears that conflict in the crude-rich Middle East could disrupt supply. Brent crude rose 0.9 percent to $72.27 per barrel, while West Texas Intermediate gained 0.9 percent to $67.05.
Equity markets reacted cautiously. Tokyo’s Nikkei 225 fell 1.1 percent, while Hong Kong dropped 0.7 percent after reopening from a public holiday. Sydney, Wellington and Bangkok also recorded losses. However, Seoul hit a fresh record on continued tech buying, with gains also seen in Singapore, Manila and Mumbai.
Market analysts noted that while military rhetoric has intensified, diplomatic talks between the United States and Iran are still ongoing following recent Omani-mediated discussions in Geneva.
In Indonesia, shares slipped despite a new trade agreement between Washington and Jakarta. The deal imposes a 19 percent tariff on Indonesian exports to the United States and includes commitments by Indonesia to purchase US energy, agricultural products and aviation goods.
On Wall Street, the Dow Jones closed down 0.5 percent, while London’s FTSE 100 shed 0.6 percent. Currency markets were mixed, with the dollar edging higher against the yen but slipping slightly against the euro and pound.