Asian markets today mostly traded higher on Wednesday, March 25, on optimism over Washington’s push to bring an end to the nearly month-long conflict in the Middle East.
South Korea’s KOSPI climbed 3%, while the small-cap KOSDAQ advanced 3.18%. Meanwhile, Australia’s S&P/ASX 200 rose 2% on Wednesday.
Japan’s Nikkei 225 gained 2.88%, while the TOPIX added 2.4%. Hong Kong’s Hang Seng Index edged up 1.14%, while China’s CSI 300 increased 0.67%.
Back home, trends in the GIFT also point to a positive opening for the Indian benchmark indices. The GIFT Nifty was trading near the 23,120 level, reflecting a premium of about 192 points over the previous close of Nifty futures.
“Asian markets traded higher, buoyed by comments from Donald Trump suggesting the possibility of negotiations between the United States and Iran. This potential for diplomatic engagement has provided some relief to global investors, raising hopes of a de-escalation in Middle East tensions. Crude oil prices have slipped below the $100 per barrel mark, reflecting sustained market optimism around the prospects of a diplomatic breakthrough. However, conflicting signals from Iran, which has denied any formal talks, suggest that the situation remains fluid, potentially limiting the durability of this optimism,” said Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth.
US-Iran war
Sentiment improved on Wednesday after remarks from Donald Trump signalled the possibility of talks with Iran, despite Tehran denying any direct negotiations with Washington.
Speaking at the Oval Office on Tuesday, Trump stated that the US and Iran were “currently in negotiations” and indicated that Tehran was interested in reaching a peace agreement. He also noted that he had pulled back from earlier threats to target Iranian energy infrastructure, citing the ongoing discussions.
Donald Trump said Iran had made a “gesture of goodwill” in ongoing talks, noting its link to flows through the Strait of Hormuz and highlighting the US view that there remains a “possibility of diplomacy.” According to Axios, the US and regional mediators are considering resuming high-level peace negotiations as early as Thursday, though they are awaiting Tehran’s response.
Trump added that discussions are being led by JD Vance, Marco Rubio, and special envoys. Meanwhile, The Wall Street Journal reported that the United States plans to deploy around 3,000 troops from the 82nd Airborne Division to the Middle East.
US stock market
Wall Street declined in a volatile session on Tuesday, as investors oscillated between concerns over rising oil prices and optimism around a possible resolution to the US-Israeli conflict with Iran.
The Dow Jones Industrial Average fell 84.41 points, or 0.18%, to 46,124.06. The S&P 500 declined 24.63 points, or 0.37%, to 6,556.37, while the Nasdaq Composite dropped 184.86 points, or 0.84%, to 21,761.89.
On Monday, had recorded their biggest single-day gain since February 6 in the previous session, after oil prices eased following Trump’s decision to delay strikes on Iranian power facilities and initiate talks with Tehran, despite Iran denying any negotiations. However, energy prices rebounded on Tuesday, with crude oil futures settling over 4% higher.
The market is no longer pricing in in any rate cuts this year, a shift from earlier expectations of two reductions before the Middle East conflict escalated. Instead, expectations for rate hikes have inched higher amid rising tensions, with the latest estimates from the CME FedWatch Tool indicating a more than 30% probability of a rate hike by year-end.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.