Asia-Pacific markets opened mixed on Monday as investors reacted to escalating geopolitical tensions after Donald Trump moved to impose a naval blockade on Iranian ports following the collapse of United States-Iran negotiations.
The breakdown of talks in Islamabad over the weekend has reignited fears that the conflict in the Middle East could drag on, fuelling concerns about sustained disruptions to global energy supply and rising inflationary pressures.
Oil prices surged in response to the developments. West Texas Intermediate crude jumped 8.2% to US$104.51 per barrel in early deals, while Brent crude climbed 7% to US$101.86 per barrel.
Trump is also reportedly weighing a resumption of airstrikes on Iran, according to The Wall Street Journal, adding to market unease.
By 11:45 am AEST (1.45 am GMT), Australia’s S&P/ASX 200 fell 0.4%, while Japan’s Nikkei 225 rose 1.8%. South Korea’s KOSPI 200 declined 1%.
The cautious tone followed a mixed session on Wall Street at the end of last week. The Dow Jones Industrial Average fell 0.6%, the S&P 500 slipped 0.1%, while the Nasdaq Composite gained 0.4%.
Commodity markets had been softer prior to the latest escalation. On Friday, Brent crude eased 0.8% to US$95.20 per barrel, while spot gold slipped 0.3% to US$4,750.78 per ounce.
Elsewhere in Asia, Chinese equities closed higher in the previous session, with the SSE Composite Index rising 0.5% to 3,986.2 and the CSI 300 gaining 1.5% to 4,636.6.
Hong Kong’s Hang Seng Index added 0.5% to 25,893.5, while India’s BSE Sensex climbed 1.2% to 77,550.3.
European markets were largely range-bound on Friday. The UK’s FTSE 100 finished flat at 10,600.5, Germany’s DAX held steady at 23,804.0, and France’s CAC 40 edged 0.2% higher to 8,259.6.
