Asia report: Markets fall as Trump speech unsettles sentiment
By Josh White
Date: Thursday 02 Apr 2026
(Sharecast News) - Asia-Pacific markets fell sharply on Thursday, reversing earlier gains as oil prices surged following a national address from US president Donald Trump on the Iran war, which unsettled investor sentiment across the region.
Patrick Munnelly, market strategy partner at TickMill, said: "Oil prices soared, while global risk sentiment once soured, following president Donald Trump's stern warning that the US would strike Iran 'extremely hard' within the next two to three weeks," adding that "Trump's comments injected fresh volatility into financial markets."
During his 19-minute speech, Trump reiterated that US objectives in Iran were nearly achieved, stating that "we have all the cards" in the conflict, while warning Washington would hit Iran "extremely hard" over the next two to three weeks.
Earlier, he had claimed that Iran's "New Regime President" had sought a ceasefire, a claim denied by Tehran, adding the US would only "consider" such an offer once the Strait of Hormuz was "open, free, and clear."
His comments contrasted with previous reports that he was willing to end the campaign even if the key waterway remained closed.
Munnelly noted that "his more aggressive tone during a nearly 20-minute speech dashed hopes for a quick settlement," and that "Trump's failure to outline a clear policy shift or provide specifics on future military actions left markets unsettled."
Equities fall in Japan, Greater China
In Japan, the Nikkei 225 dropped 2.38% to 52,463.27, with losses led by Sumitomo Pharma, down 9.57%, Shift, which fell 6.68%, and Taisei Corporation, down 6.61%.
The Topix declined 1.61% to 3,611.67.
Reflecting the broader risk-off tone, Munnelly said "Asian equities dropped sharply, with a regional index falling 2.2%, and S&P 500 futures slid 1.3%, signalling that the recent two-day market rebound might falter."
Chinese equities also retreated, with the Shanghai Composite falling 0.74% to 3,919.29 and the Shenzhen Component losing 1.6% to 13,486.94.
Among the biggest decliners were Xilinmen Furniture, down 10%, Guangxi Guidong Electric Power, which fell 9.98%, and Huadian Energy, down 9.98%.
In Hong Kong, the Hang Seng Index slipped 0.7% to 25,116.53, with Longfor Properties down 3.67%, Xiaomi falling 3.56%, and SMIC losing 3.5%.
Seoul leads regional losses as consumer inflation hastens
South Korea saw the steepest losses in the region, with the Kospi 100 plunging 4.86% to 5,941.37.
HD Hyundai Marine Solution dropped 9.28%, Hanmi Pharm fell 8.68%, and Doosan declined 8.43%.
Economic data showed consumer prices in the country rose 2.2% year-on-year in March, up from 2.0% in February but below expectations for a 2.4% increase, as higher oil prices and shipping costs linked to the Iran conflict pushed inflation above the central bank's target.
On a monthly basis, prices rose 0.3%, below forecasts of 0.6%, while core inflation stood at 2.2% annually and 0.1% month-on-month, underscoring the impact of rising energy costs on the import-dependent economy.
Munnelly added that "the escalating conflict in Iran is fuelling concerns about rising inflation," with energy markets acting as "a key transmission channel," while warning that disruptions to supply chains and shipping could amplify price pressures across economies.
Sydney in the red as Australia's trade surplus beats expectations
Australian markets also moved lower, with the S&P/ASX 200 declining 1.06% to 8,579.50.
Generation Development Group dropped 11.16%, Zip Co fell 8.16%, and Temple & Webster Group lost 7.55%.
Data showed Australia's trade surplus widened to AUD 5.686bn (£2.96bn) in February from a revised AUD 2.26bn, beating expectations of AUD 2.5bn, as exports rose 4.9% month-on-month and imports fell 3.2%.
In contrast, New Zealand's S&P/NZX 50 rose 0.59% to 12,902.15, supported by gains in EBOS Group, up 4.74%, Ryman Healthcare, which added 3.38%, and Pacific Edge, up 2.94%.
Dollar strengthens as oil prices rise again
Currency markets reflected a stronger dollar, with the greenback rising 0.53% on the yen to trade at JPY 159.66, as it rose 0.91% against the Aussie to AUD 1.4565, and gained 0.8% on the Kiwi to change hands at NZD 1.7522.
Munnelly noted that "the US dollar strengthened, reaffirming its role as a safe-haven asset during geopolitical instability," as investors retreated from riskier assets.
Oil prices surged sharply amid escalating geopolitical tensions, with Brent crude futures last up 7.35% on ICE at $108.60 per barrel, and the NYMEX quote for West Texas Intermediate climbing 7.84% to $107.97, amplifying concerns over inflation and growth across the region.
Munnelly added, "Brent crude oil jumped as much as 6.9%, exceeding $108 per barrel, as ongoing clashes kept the critical Strait of Hormuz ... effectively closed, further tightening supply chains," reinforcing fears that prolonged conflict could "sustain elevated energy costs and hinder economic growth."
Reporting by Josh White for Sharecast.com.
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