Asian markets plunged on Wednesday, led by a dramatic selloff in South Korea, as investors rushed to unwind chipmaker bets amid rising fears that a prolonged Middle East war could trigger a sustained energy shock. South Korea Triggers Circuit Breaker KOSPI Index slumped more than 11%, prompting a circuit breaker. Two-day losses widened to 17% — the steepest since 2009 . The Korean won dropped to a 17-year low , compounding market stress. Elsewhere: Nikkei 225 fell 4.3% Taiwan stocks dropped 3.6% S&P 500 futures slipped 0.6% Key Point: Heavy profit-taking in semiconductor stocks amplified the regional selloff. Chipmakers had been among the hottest trades in recent months, driven by AI demand. Investors are now cashing out of crowded positions. Oil Surge Drives Inflation Fears Brent crude rose more than 13% this week to US$82.08 per barrel. Prices retreated slightly after Donald Trump ordered insurance guarantees for Gulf shipping and signalle...
Asian markets resumed their selloff on Tuesday as escalating Middle East tensions pushed oil prices sharply higher, stoking fresh concerns about inflation and economic stability.
Asia Markets Under Pressure
MSCI Asia Pacific Index (ex-Japan) fell 1%, marking a second straight day of losses.
Key market moves:
Korean stocks plunged 2.5%
Nikkei 225 dropped 0.8%
S&P 500 futures slipped 0.2%
Investor sentiment remains fragile after US and Israeli strikes on Iran heightened fears of broader regional escalation.
An Iranian Revolutionary Guards official warned that the Strait of Hormuz — a critical global oil chokepoint — is closed to marine traffic, threatening global supply routes.
Key Point: Rising geopolitical risk and energy price spikes are reviving global inflation fears.
Oil and Gas Surge
Brent crude surged as much as 13% to US$82.37 per barrel, the highest since January 2025, before settling 7.1% higher at US$78.07.
European and Asian LNG prices jumped around 40% in a single session.
The Strait of Hormuz handles roughly 20% of global oil shipments, making any disruption highly sensitive for energy markets.
Wall Street Stabilises — But Risks Linger
S&P 500 Index ended flat after rebounding from early losses.
Nasdaq Composite gained 0.4% as investors bought the dip.
However, inflation concerns are intensifying:
ISM manufacturing data showed rising factory prices.
Tariffs were already pushing costs higher before oil prices spiked.
The surge in energy prices complicates the Federal Reserve’s inflation fight.
According to CME FedWatch:
97.5% probability the Fed holds rates steady at its March 18 meeting
June rate hold odds have risen to slightly above 50%
The US dollar index hovered near a six-week high at 98.494, regaining safe-haven appeal.
US 10-year Treasury yields slipped to 4.03%.
Safe Havens in Focus
Gold rose 0.2% to US$5,336.99
Bitcoin dipped 0.1%
Ether gained 0.3%
Key Point: Markets are rotating toward safe havens as energy-driven inflation risks resurface.
Big Picture
Markets were already grappling with elevated economic policy uncertainty. The Iran conflict adds another layer of instability, similar to the volatility spike seen during the 2022 Russia-Ukraine war.
With oil prices surging and the Strait of Hormuz potentially disrupted, investors are now watching for:
Sustained inflation pressure
Central bank policy responses
Broader spillover into global trade and growth
Overall theme: Energy shock from Middle East conflict is amplifying inflation concerns and driving risk-off sentiment across global markets.
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