Asian markets saw declines due to renewed geopolitical tensions stemming from US military actions against Iran, impacting investor sentiment. Oil prices surged by 4% following significant losses in the previous session. Japan’s Nikkei 225 dropped over 1% to 63,905, while South Korea’s KOSPI fell nearly 5% to 7,841.01.
Hong Kong’s Hang Seng index slipped by 2.37% or 600 points to 24,727, and China’s Shanghai Composite index decreased by 0.90% or 36.95 points to 4,056.78. The US military conducted defensive operations against Iranian targets after intercepting drones near the Strait of Hormuz, leading to selling pressure in the markets. Reports indicated that US forces shot down four Iranian attack drones and targeted a ground control station in Bandar Abbas.
Crude oil prices rebounded significantly after sharp losses, with Brent crude rising by approximately 4.08% to trade near $100 per barrel. US benchmark West Texas Intermediate (WTI) crude also surged by more than 4% to around $92.52 per barrel. The S&P 500 in the US saw a marginal increase of 0.02% to 7,520.36, while the Nasdaq rose by 0.07% to close at 26,674.73.
The situation is compounded by ongoing uncertainty in negotiations between the US and Iran regarding the reopening of the critical Strait of Hormuz, a vital route for global oil supplies. Gold and silver prices dipped in international markets due to a stronger US dollar and heightened geopolitical tensions post the US military actions against Iran, raising concerns of prolonged inflation. Domestic equity markets in India were closed for trading on Thursday in observance of Eid al-Adha.
