The Tamesis
Asian markets were mostly lower again on Friday with no end in sight to the war in the Middle East, while oil prices rose further after the Asian trading day ended.
After a torrid week on the trading floor, investors limped over the weekend wondering when the U.S.-Israeli war on Iran and Tehran’s attacks in the Gulf would end.
Global stock markets have been hammered by the crisis, which has sent crude oil prices surging by about a fifth since February 27, the day before the attacks began, and stoked concerns that another surge in inflation could hit the global economy.
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Despite the mid-week rebound, analysts warned that the longer the conflict lasted, the less able the market would be to absorb it.
“It’s too early to say the bottom has been reached,” IG chief market analyst Chris Beauchamp wrote.
“Unless the war ends soon – and if any more intense conflict seems more likely – markets will struggle. Volatility remains high, which means we should expect plenty of price action in both directions, but for now it looks likely that the decline will continue, even with short-term rallies in between.”
The fighting appears set to be protracted, with Iranian Foreign Minister Abbas Araghchi warning on Thursday that the Islamic Republic is demanding neither a ceasefire nor talks with the United States.
After a fresh sell-off on Wall Street, Asia is following suit.
Sydney, Wellington, Taipei, Manila, Mumbai, Bangkok and Jakarta all reiterated this view, while Singapore was unchanged.
Seoul stocks plunged nearly 19% on Tuesday and Wednesday before rebounding more than 9% on Thursday to end flat after recovering from early losses.
Hong Kong’s Hang Seng Index rose 1.7%, while the Nikkei edged up 0.6%.
Subsequently, London, Paris, and Frankfurt all opened slightly higher.
Concerns about oil prices
Investors are increasingly concerned that soaring crude oil prices will drive up inflation, forcing central banks to reassess plans to cut interest rates, with some analysts warning they may even consider raising rates.
Although Iran has not officially closed the Strait of Hormuz, shipping in the waterway has all but dried up.
Still, there was some relief on the oil front as two major contracts were eased after U.S. Interior Secretary Doug Burgum said officials were considering plans to curb rising oil prices – although they subsequently recouped early losses.
He said “everything is under consideration,” including the possibility of joining other countries in tapping the country’s reserves.
With that in mind, the White House on Thursday temporarily Easing sanctions on Russia to allow its oil currently stranded offshore to be sold to India Until April 3rd.
Finance Minister Scott Bessant said the exemption was issued “to allow oil to continue to flow into global markets”.
Earlier this week, U.S. President Donald Trump pledged to pass The Strait of Hormuz, through which one-fifth of the world’s crude oil supply and a large amount of natural gas pass.
Other countries have also taken action to address the issue, with China asking its largest refinery to suspend diesel and gasoline exports, Bloomberg reported.
However, prices remain high. Brent crude was up about 19% since Friday, while WTI surged more than 22%, topping $80 a barrel for the first time since January last year.
Pepperstone’s Chris Weston added that investors were trading with an eye on possible developments over the weekend.
“With higher volatility, traders may face the possibility of large gap moves in both directions when markets reopen on Monday,” he wrote.
After the Asian trading day, Brent crude oil futures rose 4.5% to US$89.23 per barrel, hitting a 52-week high and a level not seen in the past two years. West Texas Intermediate crude futures rose 6.3% to $86.06, their highest level since April 2024.
Key figures around 0815 GMT
SEOUL – Kospi: unchanged at 5,584.87 (close)
TOKYO – Nikkei 225: up 0.6% to 55,620.84 (close)
Hong Kong – Hang Seng Index: up 1.7% to 25,775.29 (close)
LONDON – FTSE 100: up 0.2% to 10,430.44
Shanghai – Composite Index: up 0.4% to 4,124.19 (close)
USD/JPY: up from 157.55 yen to 157.57 yen
NEW YORK – Dow: down 1.6% to 47,954.74 (close)
- AFP Additional input and editing by Jim Pollard
Note: The title and text of this report were modified on March 6, 2025, to note the increase in oil price futures.
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