Iran war and soaring oil prices push Asian stocks down, with Chinese data in focus

Investing.com - On Monday, most Asian stock markets declined amid ongoing Middle East conflict entering its third week with no clear signs of easing, keeping oil prices under upward pressure.

After experiencing a weekly decline on Wall Street, U.S. stock index futures edged higher during Asian trading hours.

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Traders weigh the impact of soaring oil prices amid Iran conflict

Investors remain cautious about the economic impact of the escalating conflict between the U.S., Israel, and Iran, which has disrupted energy flows and heightened geopolitical risks in global markets.

Oil prices stay above $100 per barrel as concerns persist about potential supply disruptions in the Gulf region. The recent surge is driven by attacks near strategic waterways and energy infrastructure around the Strait of Hormuz, through which about one-fifth of the world’s oil supplies are typically transported.

With the conflict entering its third week, no clear signs of de-escalation have emerged. Over the weekend, U.S. President Donald Trump threatened further strikes on Iran’s main oil export hub on Kharg Island and indicated he is not yet ready to reach an agreement to end the conflict.

The surge in crude prices has heightened inflation concerns, especially in Asia, where many economies heavily rely on imported energy.

Japan’s Nikkei 225 fell 1.2%, while the broader Topix index declined 1%.

South Korea’s KOSPI dropped 0.5%, and Singapore’s Straits Times Index was roughly flat.

Australia’s S&P/ASX 200 declined 0.5%, while futures linked to India’s Nifty 50 rose slightly by 0.1%.

China’s industrial output and retail sales data in focus

Investors are also assessing China’s latest economic data released on Monday. Official figures show China’s industrial output grew 6.3% year-on-year from January to February, surpassing expectations and accelerating from December’s 5.2% growth.

Retail sales, a key indicator of consumer spending, increased 2.8% YoY, also beating forecasts and improving from December’s 0.9% growth.

The data indicate that the world’s second-largest economy started the year stronger than expected, though investors remain cautious given global geopolitical risks.

China’s Shanghai Composite fell 1%, while the blue-chip CSI 300 index declined 0.8%. Hong Kong’s Hang Seng Index was roughly flat.

Market focus now shifts to the Federal Reserve policy meeting scheduled for March 17-18.

Widespread expectations are that the U.S. central bank will hold interest rates steady as policymakers assess the impact of rising oil prices and ongoing geopolitical uncertainties on inflation.

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