Tokyo (Japan)

As US President Donald Trump signalled that US was nearing the completion of its core objectives in the operation against Iran but would continue to hit them hard over the next two weeks, the Asian Markets reacted negatively.

The prospect of an end to the US-Israel led campaign had earlier lifted global indices. But with Trump promising to send Iran back to the "stone age" over the next few weeks the sentiment turned negative.

Channel News Asia reported that MSCI's broadest index of Asia-Pacific shares outside Japan slid 0.75 per cent. Japan's Nikkei reversed course to trade down 0.79 per cent in volatile trading.

With the US President not providing a clear timeline to the end of the war, the markets failed to cheer. Another point for negative sentiment was Trump's message to Oil importing countries to muster courage and "go take the oil" from the Strait of Hormuz.

Oil prices surged after Trump's address did little to soothe investor worries over the strait's closure. Brent jumped more than 4 per cent to as high as US$105.55, while West Texas Intermediate climbed 3 per cent to hit US$103.16.

Nikkei Asia reported that Japanese stocks reversed course and erased their gains, falling over 800 points, or 1.5%, at one point. South Korea's KOSPI widened its fall to more than 2%. Taiwan's Taiex and Hong Kong's Hang Seng index were also trading slightly weaker. U.S. stock futures also fell after Trump's speech with the Dow Jones futures slipping around 1%.

Market Analyst Ajay Bagga said that markets were disappointed as the President had not signalled an off-ramp for the war.

"Nothing new, no ceasefire announcement, threats to Iran, Hormuz reopening responsibility on countries importing through it, 2-3 weeks more of kinetic action, no off ramp, no talk of ground troops action. Markets disappointed as the same messaging was rehashed after building up expectations of a very significant announcement. US futures down, Indian futures down, Oil back at 105 USD," he said.

Earlier, Trump warned that Iran could face severe military action in the coming weeks amid the ongoing conflict in the region, stating that Washington's action against the Islamic Republic is "on the cusp" of ending what he described as Tehran's "sinister threat" to the US and the world.

Delivering his address to the nation, Trump said that Iran would be hit "extremely hard" amid ongoing diplomatic talks between the two sides in order to sign a deal to end the conflict, which has been going on for over a month.

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"We are going to hit them extremely hard over the next two to three weeks. We are going to bring them back to the stone ages, where they belong. In the meantime, discussions are ongoing," the US President said.

He further claimed that there has been a "regime change" following the ongoing US and Israeli military action in Tehran but clarified that change was not an official objective of Washington, noting that the military action had already led to significant leadership losses for the Islamic Republic.