Asia-Pacific markets experienced a rally on Wednesday following U.S. President Donald Trump’s announcement that he had consented to postpone intended strikes on Iranian infrastructure for a duration of two weeks. The action was “subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz,” he stated on Truth Social. Iranian Foreign Minister Abbas Araghchi, representing the country’s Supreme National Security Council, announced on X that Tehran’s armed forces will “cease their defensive operations.”
Trump indicated that the two-week ceasefire was contingent upon Iran’s acceptance of a complete, immediate, and secure opening of the Strait of Hormuz. Araghchi indicated that safe passage through the Strait of Hormuz will be feasible for the upcoming two weeks, contingent upon coordination with Iran’s armed forces. U.S. crude oil prices experienced a significant decline following the announcement. The West Texas Intermediate declined over 16% to $94.71 per barrel by 2:40 am. International benchmark Brent experienced a decline of over 14.9%, settling at $93 per barrel. South Korea’s Kospi experienced a notable increase of nearly 7%, concluding the session at 5,872.34, while the small-cap Kosdaq rose by 5.12%, finishing the trading day at 1,089.85.
Japan’s Nikkei 225 expanded its gains to 5.39%, concluding at 56,308.42, whereas the Topix increased by 3.32% to 3,775.3. China’s CSI 300 concluded the Wednesday session with an increase of 3.49%. Hong Kong’s Hang Seng Index was last observed increasing by 2.95% at 3:05 am, having resumed trading after a holiday break. Australia’s benchmark index experienced an increase of 2.55%, reaching a level of 8,951.8. India’s Nifty 50 increased by 3.65%. “For an extended period, energy prices were poised to exert significant inflationary pressures globally. “And if there’s now a bit of a belief or some visibility that energy prices can come back down, that’s better for inflation, better for the outlook of central bank cuts and so on,” stated Josh Rubin.
Futures associated with the Dow Jones Industrial Average increased by 718 points, representing a rise of 1.5%. S&P 500 futures increased by 1.6%, while Nasdaq 100 futures rose by 1.7%. Overnight in the U.S., the S&P 500 inched up 0.08% and closed at 6,616.85, while the Nasdaq Composite advanced 0.10% to settle at 22,017.85. The Dow Jones Industrial Average declined by 85.42 points, representing a decrease of 0.18%, and concluded the trading session at 46,584.46.