Asian stock markets fell sharply on Monday as renewed geopolitical tensions in the Middle East sparked a wave of risk-off selling, with benchmarks in Japan, South Korea, China, and Hong Kong all closing in the red. Japan’s Nikkei 225 slid more than 2%, South Korea’s KOSPI dropped 1.8%, Hong Kong’s Hang Seng lost 1.5%, and China’s Shanghai Composite edged down 1.2%. The declines came after a weekend of intensified military activity and stalled diplomatic efforts, leaving investors concerned about broader regional instability.
The immediate catalyst for the equity slump was a more than 3% surge in crude oil prices, as fears mounted that the conflict could disrupt shipments through key chokepoints like the Strait of Hormuz. Brent crude climbed above $78 per barrel, while West Texas Intermediate rose to $74. Earlier in the week, Brent had already jumped 1.3% to $101.60 after the United States and Iran exchanged fire, testing a month-long ceasefire. Although Iran later said the situation had returned to normal and the US claimed the ceasefire remained in effect, markets remained jittery.
Safe-haven demand pushed gold prices up 0.8% to $2,050 per ounce, and the US dollar index strengthened against Asian currencies, adding pressure on emerging market equities. Treasury yields were little changed, with the US 10-year yield at 4.39% and Australian 10-year yields climbing six basis points to 4.99%.
In the cryptocurrency space, Bitcoin held steady, trading at $79,460 and moving closer to recording its sixth straight weekly gain. The resilience stood in contrast to the broader risk-off sentiment, suggesting that Bitcoin may have been benefiting from a bid as an alternative store of value or simply riding a separate momentum fueled by institutional inflows. While Asian markets grappled with geopolitical headwinds, Bitcoin’s price action indicated that crypto investors remained unfazed for now.
Looking ahead, markets will closely monitor diplomatic developments in the Middle East and the upcoming US non-farm payrolls report, which could further influence global risk appetite. For crypto, the main question is whether Bitcoin can sustain its weekly winning streak if traditional market turmoil deepens.
