Oil Retreats, Asia Equities Rebound After Trump Says Iran War Could End Soon -- Update

By Sherry Qin and Ronnie Harui

Oil fell and Asian equities rebounded in early Asian trade on Tuesday, making a sharp U-turn from the prior day after President Trump said the Iran war could soon be over.

Speaking at a press conference on Monday, Trump said the military campaign was progressing faster than expected, and that the U.S. was focused on keeping energy and oil flowing to the world.

"We're way ahead of schedule," the president said. Asked by reporters whether the conflict will be over this week, Trump said "No, but soon, I think so. Very soon."

Concerns over oil supply may also have been eased by comments from finance ministers from Group of Seven economies Monday that they are ready to take necessary actions to support energy supplies.

After surging above $100 a barrel on Monday, Front-month West Texas Intermediate crude oil futures fell 8.6% to $86.58 a barrel early on Tuesday, and front-month Brent crude oil futures dropped 9.1% to $89.99 a barrel, according to ICE data.

South Korea's Kospi Index, the region's biggest loser on Monday, climbed 6.25% on early Tuesday. Japan's Nikkei Stock Average rose 3.6% and Hong Kong's Hang Seng Index was 1.4% higher.

The sectors most affected by oil prices, such as shipping and airlines, rebounded as well. Cathay Pacific Airways rose 3.3% and Singapore Airlines was 1.4% higher. Among shipping companies, Cosco Shipping gained 5.8% and China Merchants Energy Shipping jumped 6.9%.

The hopes of some normalization in energy supply and logistic fuelled a reversal in crude prices and impressive recovery in risk assets, OCBC said in a research note.

However, "this is a market being driven by headlines, those headlines can turn on a dime," Josh Gilbert, Market Analyst at eToro noted.

Spot gold rose 0.8% to $5,178.42 an ounce and spot silver was up 2.7% at $89.50 an ounce.

Asian currencies were mixed against the greenback while the U.S. Dollar Index slipped 0.4% to 98.788.

Write to Sherry Qin at [e-mail] and Ronnie Harui at [e-mail]

(END) Dow Jones Newswires

03-09-26 2318ET