Asian markets fell sharply on Thursday as investors reacted cautiously to ongoing developments in the Middle East. Stocks slide in Japan, South Korea, and Hong Kong, reflecting fears of broader economic disruption caused by the Iran war.
Japan’s Nikkei.N225 reversed early gains to trade 0.7% lower, while South Korea’s KOSPI dropped 2.7% and Hong Kong’s Hang Seng index slid 1.7%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell over 1%, marking its largest monthly decline since October 2022. Analysts said stocks slide due to uncertainty over potential ceasefire talks and the continuing energy crisis.
The recent surge in oil prices has added pressure on markets. Brent crude futures rose above $104 per barrel, reflecting a 43.6% increase this month. The Strait of Hormuz remains partially closed due to the Iran war, disrupting nearly a fifth of global oil and liquefied natural gas flows. Rising energy costs have renewed inflation fears, putting additional stress on financial markets.
US President Donald Trump has indicated Iran is eager to negotiate, but Tehran maintains it will only engage on its terms. Contradictory messages have kept investors on edge. Stocks slide further as traders consider geopolitical risks, central bank policies, and the possibility of prolonged conflict.
In Europe, stock futures also point to a lower open, while the US dollar strengthens as a safe-haven currency. Gold prices fell 0.3%, on track for a 14% monthly decline, its largest drop since October 2008. Analysts warn that volatility is likely to continue until a clear resolution emerges in the Middle East.
Experts suggest energy markets will remain tight, supporting higher oil prices for the near term. Traders continue monitoring Federal Reserve and Bank of Japan interest rate policies, as well as potential interventions in currency markets.
In other news read more about Oil Drops As Hopes Grow For Middle East Peace Plan
Stocks slide across the region highlights investor caution in an increasingly uncertain global environment, influenced by war, inflation risks, and supply chain disruptions.
