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Asian Stocks Tumble as US-Iran Conflict Escalates and Oil Prices Surge

Asian Stocks Tumble as US-Iran Conflict Escalates and Oil Prices Surge. Source: Flickr

Asian stock markets plunged on Monday as escalating tensions in the Middle East triggered a sharp rise in oil prices and fueled global risk aversion. Investor sentiment weakened after the United States and Israel launched coordinated strikes on Iran over the weekend, intensifying geopolitical uncertainty and prompting a shift toward safe-haven assets.

Major Asian indices posted broad losses. Hong Kong’s Hang Seng Index dropped 2.4%, while Japan’s Nikkei 225 fell 1.6%, weighed down by heavy selling in technology shares. Japan’s TOPIX also declined 1.6%. In mainland China, the Shanghai Shenzhen CSI 300 slipped 0.6% and the Shanghai Composite lost 0.5%. Australia’s ASX 200 edged down 0.5%, Singapore’s Straits Times Index tumbled 1.8%, and India’s Nifty 50 futures fell 0.8%. U.S. stock futures also remained under pressure, reflecting continued global market volatility.

The weekend airstrikes, which reportedly killed hundreds including Iran’s Supreme Leader Ayatollah Khamenei, were followed by retaliatory attacks from Tehran targeting U.S. bases and regional sites. With both sides signaling further action, fears of prolonged conflict have heightened concerns about potential oil supply disruptions. Rising crude oil prices are adding to inflation risks across Asia, where many economies depend heavily on energy imports.

Technology stocks across the region extended losses amid ongoing uncertainty surrounding artificial intelligence and increased competition within the software sector. Investors remain cautious about how AI-driven disruption could reshape earnings growth in 2026 and beyond.

Attention in China is turning to the upcoming “two sessions” political meetings, scheduled from March 4 to March 11, where policymakers are expected to outline priorities for the 15th Five-Year Plan and introduce potential economic stimulus measures.

Meanwhile, stronger-than-expected U.S. producer inflation data has reinforced concerns about persistent inflation, potentially keeping U.S. interest rates elevated for longer. Markets are also reassessing monetary policy in Asia, with expectations shifting around potential moves by the Bank of Japan and the Reserve Bank of Australia amid evolving inflation trends.

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