Oil rose sharply and Asian stocks fell after US President Donald Trump said in his first national address since the Iran war began that the US would continue to hit Iran and "finish the job".
Instead of declaring victory or offering clarity on his strategy in the Iran war, the US president promised fresh attacks over the next two to three weeks, reviving fears of rising inflation and slowing economic growth.
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Dampened hopes of an end to the war in Iran dragged down stock prices in Asia and gave a fresh boost to oil prices early on Thursday. Brent crude, the international benchmark, jumped 6% to above $107 per barrel by early morning in Europe. US benchmark crude was up by 5% to $105.16 a barrel at the same time.
In his prime-time speech to Americans, Donald Trump said, “We are going to hit them extremely hard over the next two to three weeks. We’re going to bring them back to the Stone Ages, where they belong.”
The US president promised further strikes on energy facilities if no deal was reached with Tehran. Trump also said that the United States would “finish the job” in Iran soon, as “core strategic objectives are nearing completion” and military operations could wrap up shortly.
Trump did not mention a looming deadline he set for Iran to open the Strait of Hormuz, the critical waterway for global oil and gas transport, after he had earlier threatened US attacks on its energy infrastructure if the strait was not reopened. He did not offer a clear path to ending the supply disruptions that have sent energy prices soaring.
“The market has shown disappointment because the speech President Trump made was far less than what the market expected," said Takashi Hiroki, chief strategist at Monex in Tokyo. "There were no concrete details about the end of the hostilities with Iran.”
“What the market wants is a clear outline for the ceasefire," he said.
Tokyo’s Nikkei 225 was down 2% in Asian trading on Thursday morning at 6:15 CET. South Korea’s Kospi lost 4%.
Hong Kong’s Hang Seng fell 1%, while the Shanghai Composite index was down 0.5%.
US futures were down between 1% and 1.5%.
Gold and silver prices fell. Gold was down 2.5% at $4,691.40 per ounce, and silver lost 5.6% to $71.78 an ounce.
In other trading early on Thursday, the US dollar rose to 159.37 Japanese yen from 158.82 yen. The euro was trading at $1.1545, down from $1.1589.
