The escalation of the Middle East war drives oil prices soaring, and Asian stock markets plummet

Investing.com - Asian stock markets plunged sharply on Monday, as escalating Middle East conflicts drove oil prices soaring, causing investor anxiety and reigniting concerns over global inflation pressures.

Regional stock markets opened significantly lower, with Japan’s Nikkei Index and South Korea’s KOSPI leading the declines. Crude oil prices broke above $100 per barrel for the first time in years.

After U.S. stock indexes closed lower last week, as of 02:27 GMT, Wall Street futures declined over 2%.

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Nikkei and KOSPI plunge over 7%, oil prices surge further

This sharp sell-off comes as the Middle East conflict enters its second week with no signs of easing, raising fears of a prolonged disruption to global energy supplies.

Japan’s Nikkei 225 index fell more than 7%, hitting a two-month low. The index declined over 5% last week.

South Korea’s KOSPI dropped more than 8% in early trading, triggering a circuit breaker and pausing trading for 20 minutes. The latest trading down 7.9%.

Benchmark crude oil prices surged above $100 per barrel, reaching a high of $111, marking one of the largest oil price increases in recent years.

The surge in oil prices has heightened concerns that global inflation could accelerate again, even as many central banks prepare to ease monetary policy.

Additionally, Iran appointed Mojtaba Khamenei as the successor to its Supreme Leader Ali Khamenei, a move seen by markets as a sign of continued hardline policies and ongoing geopolitical tensions.

Traders assess China’s CPI and PPI data

Meanwhile, investors digested the latest economic data from China, which sent mixed signals about the outlook for the region’s largest economy.

China’s February Consumer Price Index (CPI) rose 1.3% year-over-year, picking up from a modest increase in January, while Producer Prices continued to decline, though the deflationary pace slowed.

The inflation data suggests domestic demand may be gradually stabilizing, but the sharp rise in global energy prices could impose new cost pressures on businesses and consumers.

China’s Shanghai Composite and CSI 300 indices both fell 2%, while Hong Kong’s Hang Seng declined 3.5%.

Markets remain volatile amid rising oil prices and escalating geopolitical tensions.

Australia’s S&P/ASX 200 index dropped 4%, and Singapore’s Straits Times Index fell 3%.

Futures linked to India’s Nifty 50 declined over 2%.

This article was translated with the assistance of artificial intelligence. For more information, please see our Terms of Use.