Asia-Pacific markets opened mixed on Monday as investors remained cautious amid escalating tensions between the United States and Iran following a naval confrontation in the Gulf of Oman.
U.S. President Donald Trump said on Sunday via a post on Truth Social that a U.S. Navy guided missile destroyer had fired on and disabled an Iranian-flagged cargo ship before Marines boarded and seized the vessel, marking a further escalation in the standoff.
The strategic waterway, which links the Persian Gulf with the Gulf of Oman, remains a focal point for global energy markets.
The United States has maintained a naval blockade of ships entering and exiting Iranian ports since last week.
Tehran has condemned the blockade as a violation of the ceasefire agreement and cited it as a key reason for withdrawing from planned peace talks in Islamabad.
Trump warned that the U.S. would escalate its response if Iran fails to meet Washington’s demands, stating he would “knock out every single Power Plant, and every single Bridge, in Iran” if an agreement is not reached.
By 11:10 am AEDT (1:10 am GMT), Australia’s S&P/ASX 200 had fallen 0.4%, Japan’s Nikkei 225 gained 0.7%, and South Korea’s KOSPI 200 lifted 1.2%.
In China, the central bank held its loan prime rates steady, in line with expectations. The People’s Bank of China held the one-year loan prime rate at 3.0% and the five-year rate at 3.5%, maintaining a cautious stance as rising global oil prices and higher energy costs cloud the broader economic outlook.
Despite the geopolitical concerns, U.S. markets had finished the previous session strongly. The Dow Jones Industrial Average rose 1.8%, while the S&P 500 gained 1.2% to close at a record high. The Nasdaq Composite also advanced 1.5%, ending at a fresh record high.
China's mainland markets were subdued on Friday, with the Shanghai Composite Index edging 0.1% lower to 4,051.4 and the CSI 300 slipping 0.2% to 4,728.7.
Hong Kong’s Hang Seng Index also ended 0.9% lower at 26,160.3, while India’s BSE Sensex rose 0.7% to 78,493.5.
In commodities, oil prices had fallen sharply on Friday amid hopes of easing supply disruptions. Brent crude dropped 9.1% to $90.38 per barrel. Meanwhile, spot gold rose 1% to $4,786.46 per ounce.
European markets also closed higher at the end of last week. The UK’s FTSE 100 rose 0.7% to 10,667.6, Germany’s DAX climbed 2.3% to 24,702.2, and France’s CAC 40 gained 2% to 8,425.4.
