Asian stocks tumble as US-Iran threats deepen market anxiety
The Chronify
Asian stock markets fell sharply on Monday after Washington and Tehran threatened further escalation in the Middle East, shaking investor confidence as the Iran war entered its fourth week. The latest selloff followed President Donald Trump’s warning that the United States would strike Iranian power plants if Tehran did not reopen the Strait of Hormuz within 48 hours, and Iran’s response that any such attack would trigger retaliation against critical infrastructure across the region.
Japan’s Nikkei 225 dropped 3.8 percent in early trade, while South Korea’s Kospi fell 5.2 percent. Losses were also recorded across Hong Kong, Taiwan and other Asia-Pacific markets, as traders priced in the risk of a deeper energy shock and a longer conflict.
Oil prices stayed elevated as the standoff over Hormuz continued. Brent crude traded around $112.62 a barrel, while US crude hovered near $98.75, keeping pressure on import dependent Asian economies already hit by supply uncertainty. Around one fifth of global oil and liquefied natural gas normally passes through the Strait of Hormuz in peacetime, making any prolonged disruption a major threat to regional energy security.
The wider economic warning also grew louder on Monday. The head of the International Energy Agency said the world could be facing its worst energy crisis in decades, adding that the current supply shock is larger than the combined impact of the oil crises of the 1970s. He also said the agency is consulting governments on whether further emergency stock releases are needed after a record 400 million barrel release earlier this month.
The market reaction reflected fears that higher fuel costs will keep inflation under pressure and reduce the chances of interest rate cuts. US Treasury yields rose to multi month highs, while the dollar strengthened as investors moved toward safer assets and reassessed the global growth outlook. Asia remains especially vulnerable because many of its largest economies rely heavily on Gulf oil and gas shipments that would usually pass through Hormuz.
Oil prices stayed elevated as the standoff over Hormuz continued. Brent crude traded around $112.62 a barrel, while US crude hovered near $98.75, keeping pressure on import dependent Asian economies already hit by supply uncertainty. Around one fifth of global oil and liquefied natural gas normally passes through the Strait of Hormuz in peacetime, making any prolonged disruption a major threat to regional energy security.
The wider economic warning also grew louder on Monday. The head of the International Energy Agency said the world could be facing its worst energy crisis in decades, adding that the current supply shock is larger than the combined impact of the oil crises of the 1970s. He also said the agency is consulting governments on whether further emergency stock releases are needed after a record 400 million barrel release earlier this month.
The market reaction reflected fears that higher fuel costs will keep inflation under pressure and reduce the chances of interest rate cuts. US Treasury yields rose to multi month highs, while the dollar strengthened as investors moved toward safer assets and reassessed the global growth outlook. Asia remains especially vulnerable because many of its largest economies rely heavily on Gulf oil and gas shipments that would usually pass through Hormuz.
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