On Friday, Asia-Pacific stocks initially fell in early trading due to heightened concerns over potential U.S. troop deployments to the Middle East, following former President Trump's announcement of an extension to Iran negotiation deadlines. However, markets rebounded in the afternoon, with South Korean equities erasing a 4% decline, while spot gold and silver prices advanced.
According to reports, Trump stated via social media on Thursday, April 26, that airstrikes on Iranian energy facilities would be postponed by ten days, until 8 p.m. Eastern Time on April 6.
The South Korea Composite Index briefly turned positive, reversing an earlier loss of 4.4%.
Spot gold climbed above $4,470 per ounce, rising more than 2% on the day. Spot silver reached $70 per ounce, gaining 3%.
The yield on Japan’s 30-year government bond increased by 14 basis points to 3.66%, while the 20-year bond yield rose 10 basis points to 3.22%.
[Updated at 9:00 AM] Despite Trump's announcement of a ten-day delay in strikes on Iranian energy facilities, expectations of additional U.S. military deployments to the Middle East and market caution over potential weekend escalation kept investors on high alert.
Overnight selling pressure from Wall Street spread to the Asia-Pacific region, leading to broad declines on Friday. Japan’s stock market fell 2%, while Australia’s S&P/ASX 200 dropped 0.8%.
South Korean equities led the declines with a 4.1% drop. As a key market for artificial intelligence investments, South Korean stocks were particularly affected by the ongoing sell-off in the technology sector. Memory stocks continued to fall, with SK Hynix down more than 5% and Samsung Electronics declining over 4%.
Reports indicated that Trump agreed to delay airstrikes on Iranian energy facilities at the request of the Iranian government, pushing the deadline to April 6. However, U.S. media suggested that the Pentagon is preparing a military plan for a "decisive strike" against Iran, which may involve ground troops and large-scale bombing.
Negotiation prospects remain uncertain. Tony Sycamore, a market analyst at IG Australia, noted in a research report:
Extending the deadline essentially postpones the issue and delays any concrete timeline for reopening the Strait of Hormuz, which only prolongs the uncertainty hanging over markets and the global economy.
Kyle Rodda, an analyst at Capital.com, pointed out that markets were caught off guard by a sudden U.S.-Israel military strike in late February, which occurred even as negotiations appeared to be progressing smoothly. He added:
The current situation is highly similar. Markets are positioning for potential escalation over the weekend.
Oil prices fluctuated near recent highs, with WTI crude briefly rising to $93.65 before retreating more than 1% from its daily peak.
In currency markets, the U.S. dollar index was largely flat with a slight decline. Conflicting signals regarding the Middle East situation kept foreign exchange traders cautious. The euro traded at $1.1526, while the Japanese yen maintained losses from the previous session.
Amid mixed signals from the Middle East and market hedging against potential weekend escalation, geopolitical tensions supported safe-haven demand for gold. Gold prices edged up 0.15% to $4,384 per ounce.