Portugal Colonial - Crude extends rally as US-Iran flare-up rocks peace hopes

However, equity markets mostly rose with tech firms seeing a touch of bargain-buying, with Seoul and Tokyo enjoying healthy gains in early trade.

Crude soared Wednesday when the US president -- in response to tit-for-tat attacks in the region already taking place -- said the fragile truce between the foes was over.

Washington also revoked a temporary sanctions waiver for Iranian oil.

Both main contracts soared around eight percent, with Brent topping $80 a barrel for the first time in two weeks, fanning fresh fears of a spike in inflation and a hit to the economy.

Trump ordered new strikes Wednesday and warned of "much worse" if Tehran continues to attack vessels in the strait, through which a fifth of world oil usually passes.

"This is in retribution for yesterday's bombing of ships by Iran," he said in a post on Truth Social.

However, the US president said earlier that he expected the latest military flare-up to end quickly and left the door open to more talks.

He also claimed Tehran had "called a little while ago" and that the Iranians wanted "to make a deal so badly", but did not provide further details of the call -- including who was on the line.

He then went on to cast doubt over the value of any deal, calling the Iranians "sort of crazy".

"Trump's remarks set sparks flying -- the comments underscored fears that we could see further escalation and a return to pre-MOU conditions," said Neil Wilson at Saxo Markets, referring to the memorandum of understanding that paved the way for peace talks.

But he added: "For what it's worth, I don't think this is the base case as A) Trump is wont to throw around threats and B) both sides need to return to a kind of hazy pre-war 'normality'.

"But it clearly seems the risk of a total breakdown in negotiations has increased and markets are reflecting this fresh dynamic."

Stock markets were largely higher but sentiment remains subdued as the latest pickup in geopolitical tensions comes after an extended period of selling in the tech sector fuelled by worries over extended valuations and when AI investments will see returns.

Seoul -- the poster child of Asia's AI-led tech boom this year -- added nearly two percent but remains susceptible to another pull-back, having already tanked more than 20 percent from its record high touched on June 19.

Tokyo added two percent, while Hong Kong continued its own recent rally led by Chinese tech firms. Shanghai, Singapore, Wellington and Taipei also advanced.

Meanwhile, attention will be on South Korean chip titan SK hynix, whose US listing was more than seven times oversubscribed ahead of its planned debut on Friday.

The firm is expected to announce the pricing for its American Depository Receipts later Thursday and observers suggest it could raise as much as $28 billion from the sale.

The firm's Seoul-listed shares were up almost seven percent Thursday, though since hitting its record high last month it has lost more than 30 percent as it was at the forefront of the latest tech rout.

- Key figures around 0230 GMT -

West Texas Intermediate: UP 1.4 percent at $74.52 a barrel

Brent North Sea Crude: UP 1.3 percent at $79.00 a barrel

Seoul - Kospi: UP 2.2 percent at 7,404.73

Tokyo - Nikkei 225: UP 2.0 percent at 68,180.55 (break)

Hong Kong - Hang Seng Index: UP 0.5 percent at 24,319.47

Shanghai - Composite: UP 0.1 percent at 3,974.63

Dollar/yen: DOWN at 162.47 yen from 162.54 yen on Wednesday

Euro/dollar: UP at $1.1427 from $1.1422

Pound/dollar: UP at $1.3399 from $1.3396

Euro/pound: UP at 85.28 pence from 85.26 pence

New York - Dow: DOWN 1.1 percent at 52,348.39 (close)

London - FTSE 100: DOWN 1.7 percent at 10,489.04 (close)

E.Paulino--PC