Asian stock markets fell sharply on Monday after oil prices surged on fears that escalating tensions in the Middle East could disrupt global energy supplies through the Strait of Hormuz, thus triggering a broad risk-off sentiment across the region.
South Korea's KOSPI was among the worst hit, dropping 6.57% to 5,217.73, while Japan's Nikkei 225 slid 6.43% to 52,042.50, reflecting concerns over the impact of higher energy costs on import-dependent economies.
Losses were widespread across the region. The Philippines' PSEi Composite fell 5.32%, while Australia's S&P/ASX 200 declined 3.67%. Indonesia's IDX Composite dropped 3.49% as investors moved away from risk assets.
In Greater China, declines were comparatively contained. Hong Kong's Hang Seng Index slipped 2.38%, while mainland China's Shanghai Composite fell 1.95% and the SZSE Component dropped 2.57%.
Indian markets also reflected cautious sentiment ahead of the open. GIFT Nifty futures were down about 2.35%, signalling a weaker start for domestic equities, though the decline remained relatively milder compared with several other Asian peers.
The regional sell-off followed a sharp surge in crude prices amid renewed tensions involving the U.S., Israel and Iran, raising concerns that supply flows through the Strait of Hormuz—a key artery for global oil trade—could be disrupted. Oil prices briefly spiked close to 30%, fuelling fears of higher inflation and slower economic growth, particularly for energy-importing economies.
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