Asia-Pacific equity markets plunged on Monday as a surge in oil prices above US$100 a barrel triggered a broad-based regional sell-off, with investors rattled by escalating conflict in the Middle East and growing fears of a global economic slowdown.
By 11:55 am AEDT (12:55 am GMT), Australia’s S&P/ASX 200 had dropped 3.6%, Japan’s Nikkei 225 tumbled 6.4%, while South Korea’s KOSPI 200 slumped 7.2%.
The sell-off followed a dramatic rally in oil prices, which surged after major Middle Eastern producers curtailed output amid ongoing disruptions in the strategically vital Strait of Hormuz.
Brent crude futures jumped 17.2% to $108.65 a barrel, while U.S. West Texas Intermediate crude rose nearly 19.1% to $108.28.
The surge in energy prices comes after several key oil producers in the region, including Kuwait, Iran and the United Arab Emirates, reduced production following the effective closure of the Strait of Hormuz, a critical shipping route for global energy supplies.
The waterway typically handles a substantial share of the world’s seaborne oil shipments, and the disruption has intensified fears of a prolonged supply shock that could push prices even higher.
Despite the sharp jump in crude prices, U.S. President Donald Trump downplayed the economic impact of the rally. Posting on Truth Social, Trump said a rise in “short term oil prices” was a “very small price to pay” for destroying Iran’s nuclear threat.
Among data releases, China’s consumer inflation rose at its fastest pace in more than three years in February, as holiday spending lifted prices while deflation in factory-gate prices eased.
In the United States on Friday, the major equity benchmarks all closed lower. The Dow Jones Industrial Average fell 1%, the S&P 500 declined 1.3%, and the Nasdaq Composite dropped 1.6%.
Commodity markets also reflected the heightened uncertainty. Brent crude rallied 8.5% on Friday to settle at US$92.69 per barrel, while spot gold climbed 1.8% to finish at $5,171.50 an ounce.
In mainland China, however, equity markets ended Friday’s session modestly higher. The Shanghai Composite Index rose 0.4% to close at 4,124.2, while the CSI 300 index added 0.3% to finish at 4,660.4.
Hong Kong’s Hang Seng Index also advanced, climbing 1.7% to 25,757.3, although India’s BSE Sensex moved in the opposite direction, slipping 1.4% to 78,918.9.
European markets were weaker heading into the weekend, as London’s FTSE 100 declined 1.2% to close at 10,284.8, while Germany’s DAX index fell 0.9% to 23,591.0. France’s CAC 40 also ended lower, dropping 0.7% to finish at 7,993.5.
