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Asian Markets Suffer Steep Losses After Trump's Iran War Threats

(MENAFN) Asian equity markets buckled Thursday, suffering steep across-the-board losses after U.S. President Donald Trump shattered hopes of a near-term resolution to the Iran conflict, triggering a wave of risk aversion that swept through the region's major financial centers.

South Korea's Kospi bore the heaviest blow, plunging 5.55% as of 0620 GMT — the sharpest single-session drop among major Asian indexes. Japan's Nikkei 225 shed 2.53%, while India's Sensex declined 1.91%. In China, the Shanghai Composite slipped 1.14%, and Hong Kong's Hang Seng fell 1.44%, as investors across the region retreated from risk assets in near-unison.

The selloff was directly ignited by Trump's latest remarks on Iran, which extinguished any remaining investor optimism for a ceasefire or diplomatic breakthrough and instead signaled an intensification of U.S. military operations.

Trump made his position explicit: "We're going to hit them extremely hard. Over the next two to three weeks. We're going to bring them back to the Stone Age, where they belong."

The comments landed as a cold reversal of the cautious optimism that had briefly stabilized markets earlier in the week, when traders had begun pricing in the possibility of a scaled-back U.S. military campaign. That narrative collapsed entirely following Trump's remarks, which offered no off-ramp, no diplomatic timeline, and no signal of restraint.

Thursday's Asian declines reflected a broader global reassessment of Middle East risk, as investors confronted the mounting prospect of a protracted conflict with potentially far-reaching consequences for energy markets, supply chains, and regional economic stability.

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