Asian stock markets rebounded Thursday as anxiety over potential US-Iranian conflict eased.

Tokyo's benchmark gained more than 2 per cent. Shanghai, Hong Kong and Southeast Asia markets also advanced.

Markets sank after Tehran retaliated for the US killing of an Iranian general by launching missiles at American bases in Iraq. But anxiety subsided after reports indicated no Americans were killed and President Donald Trump said Iran appears to be standing down.

The lack of casualties gave the markets more confidence that the Iranians had instigated little more than the intention to make a public show of force mainly to save face at home, said Stephen Innes of AxiTrader in a report.

Tokyo's Nikkei 225 rose 2.2pc to 23,714.16 and Hong Kong's Hang Seng added 1.1pc to 28,407.91.

The Shanghai Composite Index added 0.6pc to 3,085.34. Seoul's Kospi rose 1.2pc to 2,175.55 and Sydney's S&P-ASX 200 added 0.7pc to 6,864.00.

India's Sensex opened 1.3pc higher at 41,343.60. Taiwan and Southeast Asian markets also advanced while New Zealand declined.

On Wall Street, the benchmark S&P 500 index rose 0.5pc to 3,253.05. The Dow Jones Industrial Average advanced 0.6pc to 28,745.09. The Nasdaq composite rose 0.7pc to a record 9,129.24.

Trump said he would add economic sanctions on Iran but the United States is ready to embrace peace with all who seek it.

Oil prices rebounded Thursday after first surging on news of the Iranian attack and then falling back once tensions appeared to be easing.

Benchmark US crude gained 52 cents to $60.12 per barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract fell $3.09 to settle at $59.61. It traded as high as $65.65 following the missile attack.

Brent crude, used to price international oils, advanced 48 cents to $65.93 per barrel in London. It fell $2.83 the previous session to $65.44.

Gold had a similar whipsaw day. It climbed as high as $1,604.20 per ounce before settling at $1,560.10.

Also Thursday, China reported consumer prices rose 4.5pc in December over a year earlier, propelled by surging pork prices due to an outbreak of disease.

In currency trading, the dollar gained to 109.22 yen from Wednesday's 109.08 yen. The euro advanced to $1.1118 from $1.1105.