Global markets experienced a mixed reaction on Thursday as US President Donald Trump appeared to scale back his threats of imminent military action against Iran. Oil prices dropped by three percent after Trump stated he would “watch and see” on possible intervention, following reports that the killings of protesters in the country had stopped. This development comes after crude prices had surged in recent days due to concerns over potential disruptions to global supplies.
The decline in oil prices was accompanied by a dip in gold and silver prices. In Asia, stock markets were divided, with Hong Kong, Shanghai, Taipei, Wellington, Mumbai, and Kuala Lumpur experiencing declines, while Sydney, Seoul, Bangkok, and Manila posted minimal gains. The mixed performance in Asia followed a decline in Wall Street stocks on Wednesday, despite solid bank earnings and a 0.6 percent increase in US retail sales in November.
Analysts pointed to investor unease over possible US interventions in Iran and Greenland, as well as Trump’s threats to Federal Reserve autonomy. The US Supreme Court also delayed a widely-anticipated ruling on the legality of Trump’s sweeping tariffs. Meanwhile, the South Korean won slid towards its weakest level in 16 years, prompting US Treasury Secretary Scott Bessent to comment that the depreciation was “not in line with Korea’s strong economic fundamentals.”
In Tokyo, the stock market cooled off after gains fueled by speculation that Prime Minister Sanae Takaichi would call an election to capitalize on strong public approval ratings. Takaichi’s ruling party and coalition partner announced plans to dissolve parliament next week for a snap election. The Japanese government also approved a record budget for the fiscal year from April 2026, aimed at addressing inflation and shoring up the economy.
Key figures at around 0230 GMT included a 1.0 percent decline in the Tokyo Nikkei 225, a 0.1 percent decline in the Hong Kong Hang Seng Index, and a 0.2 percent decline in the Shanghai Composite. Oil prices fell, with West Texas Intermediate down 3.0 percent at $60.16 per barrel and Brent North Sea Crude down 3.0 percent at $64.58 per barrel. The euro and pound remained relatively stable against the dollar, while the dollar-yen exchange rate edged down.
The developments in global markets reflect ongoing uncertainty and volatility, driven by geopolitical tensions, trade policies, and economic fundamentals. As investors continue to navigate these complex factors, markets are likely to remain sensitive to news and announcements from major economies and policymakers.
