Stock markets across Asia fell on Monday as escalating conflict involving Iran drove oil prices sharply higher, fuelling fears of inflation and a potential global recession, with investors reacting to disruption risks in the Strait of Hormuz and prolonged hostilities.
Japan’s Nikkei dropped 3.4%, South Korea’s benchmark fell 3.0%, and a broad Asia-Pacific index lost 1.3%. European futures also pointed lower.
Meanwhile, oil prices jumped to multi-year highs, with Brent crude nearing $116 a barrel, on track for its biggest monthly rise since the 1990 Gulf War.
Analysts said the surge reflects mounting risks to global supply as key shipping routes face disruption.
“The longer the Strait remains closed, the sharper the drawdown in supplies,” JPMorgan economist Bruce Kasman warned, adding that oil could rise towards $150 a barrel if disruption continues.
The latest spike followed a weekend of escalation. Iran-aligned Houthi forces launched missiles and drones at Israel, while attacks were also reported on regional energy infrastructure, including damage to Oman’s Salalah terminal.
At the same time, the Strait of Hormuz, a critical route for global oil supplies, remains heavily disrupted, with shipping and insurance activity severely curtailed.
The U.S. has increased its military presence in the region, deploying thousands of additional troops, while Iran warned against any potential ground offensive.
Pakistan said it is preparing to host talks aimed at easing tensions, though markets remain sceptical about the prospects for a near-term ceasefire.
Rising energy costs are feeding into expectations of higher inflation and tighter monetary policy.
Analysts warned the shock could tip major economies towards stagflation, with one noting the conflict is now “a powerful driver of global risk” as markets struggle to price its trajectory.
Despite the volatility, traditional safe havens have offered limited relief, underscoring the uncertainty facing investors as the conflict shows little sign of easing.
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The U.S. imposed fresh Iran sanctions as President Donald Trump called Tehran’s peace response a “stupid proposal” and warned the ceasefire was on “massive life support”. Meanwhile, the Wall Streeet Journal reported the United Arab Emirates carried out covert strikes on Iran in April.
The hantavirus-hit MV Hondius has departed Tenerife bound for the Netherlands after the final six passengers and some crew left the ship. In Spain, one passenger in Madrid has tested positive, while 13 others in quarantine tested negative, the Health Ministry said.
British pop star Dua Lipa has filed a lawsuit against South Korean tech giant Samsung Electronics, seeking at least $15 million in damages over allegations that her image was used without permission to promote television sets.
Hopes for a peace deal on Iran faded on Tuesday after Donald Trump said a ceasefire with Iran was "on life support" as Tehran rejected a U.S. proposal to end the conflict and stuck to a list of demands the U.S. president described as "garbage".
Australia confirmed it will repatriate citizens from the MV Hondius cruise ship hit by a deadly hantavirus outbreak, with quarantine on arrival. Spain, France are evacuating nationals as three deaths are confirmed. In the U.S., two passengers have been isolated after testing positive for the virus.
U.S. President Donald Trump on Monday dismissed Iran’s response to a U.S. peace proposal as a “stupid proposal,” saying Tehran failed to commit to abandoning its pursuit of a nuclear weapon, while warning the fragile ceasefire was on “massive life support”.
Metropolitan Shio of Senaki and Chkhorotsku has been elected the 142nd head of the Georgian Orthodox Church at a meeting of clergy in Tbilisi following the death of longtime Patriarch Ilia II.
Afghanistan has signed a five-year gold mining contract with Afghan and Azerbaijani companies in a deal worth more than $20m, the Ministry of Mines and Petroleum has said.
A Turkish Airlines plane caught fire in its landing gear tyres after landing at Tribhuvan International Airport on Monday (11 May) morning, temporarily disrupting airport operations, officials said.
The Strait of Hormuz remains a vital maritime chokepoint and serves as the primary artery linking the Persian Gulf to international energy markets. With approximately 20% of global oil and gas shipments transiting this waterway, it is the backbone of energy security for Asia, Europe, and beyond.
China’s exports grew faster than expected in April, as overseas buyers moved quickly to secure supplies amid fears that the conflict involving Iran could drive up global energy and transport costs.
Asian stocks surged to record highs on 7 May as investors priced in growing hopes of a potential Middle East peace deal, while oil prices eased and the U.S. dollar weakened amid shifting global risk sentiment.
Stocks around the world climbed to fresh record highs on Wednesday (6 May), while oil prices fell sharply, after reports suggested the United States and Iran were nearing an agreement to end conflict.
U.S. President Donald Trump has said he will raise tariffs on cars and trucks imported from the European Union to 25% next week, up from the 15% level agreed last year, accusing the bloc of failing to comply with its trade commitments.
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