Asian stock markets began March in red, as investors reacted to increased to increasing tensions in the Middle East and stronger than expected US inflation data. Japan’s Nikkei 225 fell sharply, losing over 2%, before easing to a 1.5% drop at 57,947, shedding over 900 points by 9:15. In Hong Kong, Hang Seng declined 1.7% to 26,165. Shenzhen also traded in red, down 109 points to 14,386.Meanwhile, South Korea’s markets remained shut for a public holiday.US futures also slipped, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite initially dropping more than 1%, though losses narrowed to 0.6% by mid-morning in East Asia. Meanwhile, gold, a traditional safe haven in times of market uncertainty, climbed sharply, with US futures surging 2.58% to $5,382.60 per ounce. Traders are also concerned about oil supply disruptions following attacks on two vessels in the Strait of Hormuz, a critical shipping route for global energy. US benchmark crude initially surged nearly 8%, settling with a 4% gain at $69.60 per barrel. Brent crude jumped 4.5% to $76.17 per barrel. Energy experts warn that a prolonged conflict could drive prices of other fuels and gasoline higher. Iran, which exports about 1.6 million barrels a day mainly to China, may be forced to cut shipments, pushing buyers to seek alternative supplies. While the situation was largely anticipated due to the US military buildup in the region, traders have started adjusting positions. In currency trading, the US dollar strengthened to 156.29 Japanese yen from 156.04 late Friday, while the euro eased to $1.1788 from $1.1812.
