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SINGAPORE — Asian equities opened lower on Friday, as renewed clashes between American and Iranian forces in the Strait of Hormuz unsettled investors and sent oil prices sharply higher.
The escalation, which both sides blamed on the other, has reignited fears of instability in the Middle East and cast a shadow over recent gains in global markets.
The Nikkei 225 in Tokyo fell 0.62 percent, retreating after touching record highs earlier in the week.
In Seoul, the Kospi dropped nearly 1.9 percent, though the Kosdaq, which tracks smaller firms, managed a modest rise. Australia’s S&P/ASX 200 lost 0.88 percent, while futures in Hong Kong’s Hang Seng Index pointed to further weakness.
The declines mirrored caution in U.S. futures trading, where contracts tied to the S&P 500 and Nasdaq edged down less than 0.1 percent, and Dow Jones futures slipped by 12 points.
A Fragile Ceasefire Tested
The confrontation in the Strait of Hormuz marked the most serious flare-up since Washington and Tehran agreed to a tentative ceasefire earlier this year.
President Donald J. Trump insisted the truce remained intact, describing the incident as a “light touch.” Yet in a post on Truth Social, he claimed U.S. forces had “completely destroyed” Iranian vessels and drones, warning that Tehran would face harsher retaliation if it refused to sign a nuclear deal.
Such rhetoric has heightened uncertainty, leaving investors wary of prolonged instability in a region critical to global energy supplies.
Oil Prices Surge
Energy markets reacted swiftly. West Texas Intermediate crude rose 2.23 percent to $96.92 a barrel, while Brent crude climbed 2.40 percent to $102.46.
The surge underscored the vulnerability of oil prices to geopolitical shocks, particularly for import-dependent economies across Asia.
Wall Street’s Uneasy Session
The tension spilled into Wall Street on Thursday, where major indexes closed lower.
The S&P 500 slipped 0.38 percent, dragged down by losses in Amazon and semiconductor stocks.
The Nasdaq Composite fell 0.13 percent, despite hitting an all-time high earlier in the day.
The Dow Jones Industrial Average dropped 313 points, or 0.63 percent.
For now, the mood across Asia remains cautious. Rising oil prices threaten to stoke inflationary pressures, while the specter of renewed conflict in the Middle East adds another layer of uncertainty to markets already grappling with high valuations.
“Investors are caught between optimism over corporate earnings and the reality of geopolitical risk,” said one regional strategist. “The Strait of Hormuz is a reminder that markets can turn quickly when politics intrude.”
