Asia-Pacific markets opened lower on Thursday, tracking losses on Wall Street as renewed tensions between Iran and the U.S. kept oil prices elevated and raised concerns about energy costs and inflation.
South Korea's Kospi fell 2%, while the small-cap Kosdaq rose more than 2% as trading resumed after a holiday. Japan's Nikkei 225 declined 1.4% after reaching a record high in the previous session, while the Topix lost 0.91%. Australia's S&P/ASX 200 fell 0.84%.
The decline across regional markets came as investors assessed developments in the Middle East and their potential impact on energy prices, inflation and global growth. Higher oil prices and geopolitical uncertainty weighed on risk sentiment, pushing equity markets lower across Asia and the U.S.
Asian equities also came under pressure after a weaker-than-expected forecast from Broadcom Inc. added to concerns about market momentum.
In currency markets, the Japanese yen hovered near the 160-per-dollar level after comments from Bank of Japan Governor Kazuo Ueda suggested that an interest rate increase this month remains possible, though not certain.
Iran struck Kuwait International Airport early on Wednesday, a day after the U.S. Central Command said it had intercepted multiple Iranian ballistic missiles and drones and carried out what it described as "self-defense strikes" on Qeshm Island in the Persian Gulf. The U.S. military said the action followed "attempted attacks" by Tehran.
Israel and the U.S. remain prepared to take further military action against Iran if required, CNBC reported quoting Israeli Prime Minister Benjamin Netanyahu as saying.
"Israel is ready and the U.S. forces are ready. I think Iran should take that into account. I think they are taking into account, but they're playing with fire," Netanyahu told CNBC in an interview.
US equity-index futures declined alongside regional stocks. S&P 500 futures fell 0.5%, while Nasdaq 100 futures lost 0.6%. Futures linked to the Dow Jones Industrial Average traded marginally higher.
On Wall Street, the Dow Jones Industrial Average dropped 620.72 points, or 1.21%, to close at 50,687.07 on Wednesday. The S&P 500 fell 0.74% to 7,553.68, while the Nasdaq Composite declined 0.89% to 26,853.98.
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