Asian Stocks Surge on Hopes Middle East War May End – Asia Market Wrap

Asian equities posted their biggest rise in a year while government bonds extended gains, as investors grew hopeful that the Middle East conflict that shook global markets and disrupted energy supplies could be approaching its end.

Regional stocks climbed 4.4%, recovering from their steepest monthly drop in more than 17 years after President Donald Trump said he expects the US could bring the war with Iran to a close within two to three weeks. The surge followed advances on Wall Street as investors bet that a resolution would help stabilize oil flows and support global growth. Futures pointed to a 1.9% rise for European markets.

The dollar slipped slightly and Treasuries continued to strengthen following Trump’s remarks. However, lingering uncertainty over the conflict and the situation in the Strait of Hormuz kept oil volatile, with Brent crude hovering near $105 a barrel after giving back part of Tuesday’s decline.

An end to the fighting would likely help rebuild investor confidence after the five-week conflict rattled energy and equity markets, pushing several benchmarks into correction territory. Attention will also shift to how policymakers respond to higher energy costs and supply disruptions, as well as whether upcoming corporate earnings reflect pressure on economic activity.

Trump, who is scheduled to address the nation at 9 p.m. Eastern Time on Wednesday to deliver what he called an “important update” on Iran, said Tehran could still strike a deal with the US. He added that such an agreement is not essential for the conflict to come to an end.

Elsewhere in markets, gold rose for a fourth straight session to trade near $4,670 an ounce. Despite the recent rebound, bullion still recorded a decline of almost 12% in March, marking its worst monthly performance since October 2008.