Asian stocks rebound as oil prices fall sharply

Stock markets in South Korea and Japan rose strongly in early trading on Tuesday after global oil prices dropped sharply, easing concerns about rising energy costs and inflation.

South Korea’s benchmark Kospi index rebounded by more than five percent, recovering from heavy losses recorded the previous day. In Japan, the Nikkei 225 also climbed more than three percent in early trade before giving up some of its gains later in the session.

By around 0030 GMT, the US oil benchmark West Texas Intermediate (WTI) had fallen 6.54 percent to $88.57 per barrel, while Brent crude dropped 6.78 percent to $92.25.

Oil prices had surged on Monday amid fears that the escalating conflict in the Middle East could disrupt global energy supplies. During trading, WTI reached as high as $119.48 per barrel and the Brent international benchmark climbed to $119.50 before reversing course.

Markets shifted direction after US President Donald Trump told a CBS News journalist on Monday that he believed the war was close to ending, raising hopes that energy supplies could soon stabilize.

Chris Weston, an analyst at Pepperstone, said the developments were enough to spark expectations of some normalization in supply and logistics. As a result, traders moved quickly to sell crude and reduce volatility in equity markets.

However, Weston cautioned that geopolitical risks remain high and that market volatility is likely to persist in the coming days as the situation continues to evolve.