Asia-Pacific markets opened lower on Friday as investors reacted to renewed clashes between the United States and Iran, raising fresh concerns over the stability of the fragile ceasefire agreement.
The United States and Iran exchanged fire in the Strait of Hormuz overnight, with both sides accusing the other of initiating the confrontation.
President Donald Trump later claimed in a Truth Social post that U.S. forces had “completely destroyed” the Iranian units involved in the exchange, which included drones and small boats.
Trump also warned Iran that further military action would follow if Tehran failed to agree to a nuclear deal.
“Just like we knocked them out again today, we’ll knock them out a lot harder, and a lot more violently, in the future, if they don’t get their Deal signed, FAST!” Trump wrote.
By 10:40 am AEST, Australia’s S&P/ASX 200 had fallen 1.2%, South Korea’s KOSPI 200 declined 1.3%, and Japan’s Nikkei 225 retreated 0.4%.
Oil prices surged following reports of the renewed hostilities, as Brent crude futures for July delivery climbed 2.8% to US$102.87 per barrel, while West Texas Intermediate crude futures for June rose 2.5% to US$97.15 per barrel.
The weaker regional session followed modest losses on Wall Street overnight. The Dow Jones Industrial Average declined 0.6%, the S&P 500 fell 0.4%, and the Nasdaq Composite slipped 0.1%.
In commodities trading on Thursday, ICE Brent crude had earlier declined for a third consecutive session, falling 1.2% to settle at US$100.06 per barrel, while spot gold eased 0.1% to US$4,685.50 per ounce.
Chinese equities ended higher on Thursday, with the Shanghai SSE Composite Index gaining 0.5% to 4,180.1, its highest close since 3 March. The CSI 300 also rose 0.5% to 4,900.5, marking its strongest finish since 5 January 2022.
Hong Kong’s Hang Seng Index added 1.6% to close at 26,626.3, its highest closing level since 27 February, while India’s BSE Sensex slipped 0.2% to 77,844.5.
European markets also weakened overnight. Britain’s FTSE 100 fell 1.6% to 10,277.0, Germany’s DAX declined 1% to 24,663.6, and France’s CAC 40 lost 1.2% to 8,202.1.
