Asian markets opened the week under heavy selling pressure, with investors rattled by the prolonged escalation of tensions in the Middle East, now entering its fifth consecutive week despite ongoing diplomatic efforts. Regional benchmarks recorded sharp losses across the board as geopolitical fears intensified over the weekend.
The geopolitical backdrop worsened after Yemen’s Houthi movement reportedly launched ballistic missiles targeting Israeli military locations, marking its direct entry into the ongoing confrontation. The development signals a widening of the conflict, which initially escalated following U.S. and Israeli strikes on Iranian positions in late February.
Regional Market Performance
Markets across Asia posted significant declines as risk aversion gripped investors:
| Index | Performance |
|---|---|
| South Korea KOSPI | -5.0%+ |
| South Korea KOSDAQ | -3.97% |
| Japan Nikkei 225 | -3.97% |
| Japan TOPIX | -3.9% |
| Australia S&P/ASX 200 | -1.46% |
| Hong Kong Hang Seng | -1.52% |
| China CSI 300 | -0.77% |
Investor sentiment in Japan was further impacted by signals from the Bank of Japan, where policymakers indicated growing support for additional interest rate hikes. Discussions during the March meeting highlighted concerns that rising oil prices driven by geopolitical instability could intensify inflationary pressures. One policymaker warned that delayed action could leave the central bank lagging behind inflation trends fueled by external shocks.
Oil Prices Surge
Rising geopolitical risks pushed energy markets higher, with West Texas Intermediate crude climbing 2.58% to $102.19 per barrel during early Asian trading hours, intensifying global inflation concerns. Brent crude also traded higher amid the escalating tensions in the Middle East.
Australia Announces Fuel Relief
In response to surging fuel costs, Australian Prime Minister Anthony Albanese declared that Australia would temporarily halve fuel excise on petrol and diesel for three months. The move is expected to reduce retail fuel prices by approximately 26.3 Australian cents per litre, offering short-term relief to consumers.
U.S. Market Outlook
U.S. stock futures also pointed lower, tracking global market weakness. Futures linked to the Dow Jones Industrial Average declined 0.6%, while S&P 500 and Nasdaq 100 futures each fell 0.5%. Wall Street had already ended the previous week on a weak note, with the Dow dropping 793 points to settle at 45,166.64, entering correction territory.
The S&P 500 closed at a seven-month low after shedding 1.67%, while the Nasdaq Composite slid 2.15%. The broader market index marked its fifth consecutive weekly decline, highlighting persistent investor anxiety amid geopolitical uncertainty and tightening financial conditions.
Outlook
With geopolitical risks intensifying and energy prices climbing, global markets are expected to remain volatile in the near term, as investors closely monitor developments in the Middle East and central bank responses worldwide.
