SINGAPORE: Asian stocks rallied and oil prices plunged at the start of trading on Tuesday, following a volatile session for markets overnight after U.S. President Donald Trump declared the Middle East war could be "over soon."
MSCI's broadest index of Asia-Pacific shares outside Japan was up 2.6%, paring losses since the start of the conflict, while Brent crude futures fell as much as 10% to below $90 per barrel as trading resumed. U.S. equity futures were more muted, with S&P 500 e-mini futures down 0.2% to pare Monday's rebound.
Trump's remarks injected a burst of optimism that contrasted sharply with events in Iran, where hardliners rallied behind new Supreme Leader Mojtaba Khamenei in a pointed show of defiance. The competing signals whipsawed global markets on Monday: oil prices initially spiked and stocks on Wall Street tumbled before rebounding sharply after Trump's comments and fresh reports suggesting Washington may soften sanctions on Russian energy.
"While all of this has helped ease some of the short-term panic, it's hard to reconcile the idea of the conflict being 'very complete'", said Tony Sycamore, market analyst at IG in Sydney.
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