Asian Equities Decline Amid Escalating Gulf Conflict

Global Markets Report: March 23, 2026

Market Overview

Asian share markets declined on Monday, with the Japan Nikkei falling 3.9% and South Korea's market shedding 4.5%, leading to losses of over 13% and 12% for March, respectively. The MSCI Asia-Pacific Index outside Japan dropped 1.2%.

Oil Prices

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Oil prices continued their volatile ride, with Brent crude down 0.2% at $111.90 a barrel, yet still up 55% for the month. U.S. crude was near flat at $98.35. Analysts predict that oil prices may rise to $150 a barrel if the war continues for several weeks.

Global Economic Impact

The ongoing conflict has led to a sharp increase in energy costs, with Singapore jet fuel up 175% this year and Asian liquefied natural gas rising 130%. Bunker fuel used in shipping has also surged, raising the cost of transporting goods. Fertiliser prices have increased, making food more expensive.

Monetary Policy

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Markets have abandoned hopes for further rate cuts and are now pricing in rate hikes across most developed nations. This has led to a sharp increase in bond yields, adding to borrowing costs for governments already struggling with deficits and debt. Ten-year U.S. Treasury yields reached an eight-month high of 4.4110%, climbing 44 basis points since the war began.

Currency Markets

The U.S. dollar has benefited from the heightened volatility, with the euro at $1.1555 and the dollar flat versus the yen at 159.15. Investors are wary of a potential break of 160.00, which may trigger intervention from Japan.

Commodity Markets

Gold prices rose 0.4% to $4,511 an ounce, having lost ground last week as investors wagered on higher interest rates globally.