HONG KONG: Asian shares mostly declined Thursday following what the US military said were defensive strikes against Iran.
Oil prices gained more than USD 1 a barrel after having dropped sharply a day before US futures inched lower.
US officials said Central Command forces shot down four Iranian one-way attack drones that posed a threat near the Strait of Hormuz. The US military also hit an Iranian ground control station in Bandar Abbas that was about to launch a fifth drone.
Meanwhile, President Donald Trump asserted that Iran is “negotiating on fumes” and said November's midterm elections in the United States won't make him rush into a deal to end the nearly three-month-old conflict.
In early Asian trading, Japan's Nikkei 225 edged less than 0.1 per cent higher to 65,039.78, while the Kospi in South Korea lost 1.2 per cent to 8,126.67.
Hong Kong's Hang Seng index shed 1.9 per cent to 24,855.86 and the Shanghai Composite index fell 0.3 per cent to 4,080.00.
In Australia, the S and P/ASX 200 declined 0.8 per cent to 8,646.30, while Taiwan's Taiex gained 0.6 per cent.
“Conflicting reports on the contours of a US-Iran deal dampened risks sentiments as markets grow increasingly wary about the possibility of a deal,” Tan Boon Heng of Mizuho Bank in Singapore said in a commentary.
“While there is desire to maintain the ceasefire with both Iran and (asterisk)the) US toning down language on renewed attacks and persisting with indirect channels of communication, it remains remarkably hard to envisage how a compromise can be reached on key issues,” he said.
On Wednesday, US stocks inched to more records after oil prices declined more than 4 per cent, easing pressure on consumers and businesses worldwide.
The S and P 500 edged up by less than 0.1 per cent to 7,520.36 and the Dow Jones Industrial Average rose 0.4 per cent, to 50,644.28. The Nasdaq composite gained 0.1 per cent to 26,674.73. All three indexes set all-time highs.
Stocks of companies with big fuel bills helped lead the way on hopes that lower oil prices will remove a big drag on their profits. Norwegian Cruise Line Holdings climbed 6.1 per cent, and United Airlines rallied 6.3 per cent. Delta Air Lines rose 3 per cent and set an all-time high.
The price for a barrel of Brent crude oil fell 4.6 per cent to USD 92.25 after the ceasefire between the United States and Iran appeared to hold despite the US military launching what it called “self-defense” strikes in southern Iran.
However, after further strikes, in early Thursday trading Brent was up USD 1.70 at USD 93.95 a barrel.
A barrel of benchmark US crude gained USD 1.68 to USD 90.36. On Wednesday, it had fallen 5.5 per cent, to settle at USD 88.68, back to where it was in mid-April.
Prices have moderated, after surging well over USD 100 a barrel, on hopes that the United States and Iran can reach an agreement to reopen the Strait of Hormuz and allow oil tankers to exit the Persian Gulf for deliveries again.
Stocks have been able to run to records despite the painful inflation and uncertainty caused by high oil prices largely because companies have reported surprisingly strong profits for the start of 2026, and the forecast is for them to continue.
In other dealings early Thursday, the US dollar rose to 159.57 Japanese yen from 159.51 yen. The euro slipped to USD 1.1611 from USD 1.1626.