BENGALURU: Asian markets rebounded on Tuesday, led by South Korean stocks and the Malaysian ringgit, after US President Donald Trump said that the Middle East war could be “over soon”, calming frayed nerves a day after a surge in oil prices sparked a sharp selloff.
The MSCI emerging markets stocks index jumped 3.1 percent after two days of losses, while the EM currency index
climbed 0.8 percent, also ending a two-day slide. Both were on track for their strongest session since early February after the currency index tumbled 3 percent on Monday.
Sentiment improved after Trump said overnight that the Iran conflict could be resolved “very soon” and that the United States was “far ahead” of a four- to five-week timeline, although he cautioned it would not end this week.
He also floated waiving oil-related sanctions and deploying the US Navy to escort tankers through the Strait of Hormuz, a chokepoint for a quarter of global oil, where any disruption would hit Asia’s import-reliant economies hardest.
Oil prices fell on Tuesday after hitting a more than three-year high in the previous session.
In South Korea, the benchmark KOSPI climbed as much as 6.5 percent, rebounding sharply from Monday’s 5.96 percent plunge, after a sidecar curb was triggered early in the session when futures jumped more than 5 percent.
The rally was also supported by Seoul’s indication that it may draft an extra budget to support low-income households hit by rising oil prices. South Korean markets have triggered market circuit breakers twice since the Middle East conflict began.
The Malaysian ringgit stood out among regional currencies, strengthening 1 percent and snapping a three-day losing streak, while stocks in Kuala Lumpur gained 1.5 percent and were on course for their best session since mid-May.
India’s NSE Nifty index rose 0.8 percent after losing 1.7 percent on Monday, while the rupee strengthened 0.3 percent.
The Thai baht slipped 0.2 percent to 31.70 per dollar, though Bangkok shares added nearly 2 percent. Thailand is also seeking additional energy sources to secure fuel supplies.
Shares in Taiwan and Singapore gained more than 2 percent each, while Jakarta stocks added 1.2 percent. The Singapore dollar was little changed, while Indonesia’s rupiah strengthened 0.4 percent.
Singapore Exchange plans to launch Asian government bond futures in the coming weeks as investors increasingly turn to hedging tools.
In the Philippines, the peso reversed early gains to trade down 0.2 percent. Manila stocks, which plunged more than 5 percent in the previous session, rebounded 2 percent and were on track for their best day since early January.
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