Asian markets reversed course and rose higher on Wednesday after President Donal Trump’s recent statements eased tensions and worries over the future of the escalating conflict between the United States and Iran. Investors’ fears have since been pushing stock prices down as risks of further conflict in the Middle East.
The Nikkei 225 in Japan gained 1.63% in early trade while the Topix index was up 1.38%. In South Korea, the
Kospi added 1.42%. Australia’s ASX 200 rose 0.97%, with the heavily weighted financials subindex gaining 1%.
Stocks sold off in Asia on Wednesday after Iran launched more than a dozen ballistic missiles and attacked American bases in Iraq. The attack followed the death of a high-ranking Iranian general, Soleimani, who was killed in a U.S. sanctioned strike in Baghdad.
In recent statements, Trump then said Iran appeared to be “standing down” but added the U.S. would “immediately impose additional punishing economic sanctions on the Iranian regime.” This statement appeared to have eased the worries of investors in the Asian Markets.
“The main driver was President Trump’s delayed response to the missile strike yesterday, suggestive that he was taking a more cautious approach (than) his usual demeanor and prior tweets suggested,” Tapas Strickland, director of economics and markets at the National Australia Bank, wrote in a morning note.
The conflict in the Middle East has since been shrugged off by Wall Street in the wake of the attacks, even as oil prices rose and stocks outside the United States sank.
