Asian Markets Decline Amid Escalation of US-Iran Tensions

Global Markets Plunge Amid Escalating Middle East Conflict and Rising Energy Prices

Asian markets declined sharply on Tuesday, March 31, as surging crude oil prices and the escalating Middle East conflict kept investor sentiment fragile. The South Korean won weakened 0.63% to 1,526.9 against the US dollar, marking its lowest level since 2009.

The South Korean Kospi fell more than 4%, while the small-cap Kosdaq declined over 3%. Japan's Nikkei 225 dropped 2.2%, while the broader Topix slipped 1.4%. Australia's S&P/ASX 200 fell 0.56% on Tuesday. Meanwhile, futures for Hong Kong's Hang Seng Index stood at 24,683, compared with its previous close of 24,750.8.

In the US, the S&P 500 declined 0.39% to close at 6,343.72, marking its third straight session of losses, while the Nasdaq Composite dropped 0.73% to settle at 20,794.64. In contrast, the Dow Jones Industrial Average bucked the trend, edging up 0.11% to 45,216.

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The global market downturn came despite Jerome Powell's statement that the inflation outlook remains under control despite higher energy prices, and that the Federal Reserve does not need to respond with further interest rate hikes. Meanwhile, US-Iran tensions escalated, with Donald Trump intensifying his warning that the US could target Iran's power infrastructure, oil fields, and Kharg Island if the strategically crucial Strait of Hormuz remains blocked and no peace agreement is reached to end the conflict.

The war with Iran entered its fifth week, with the Trump administration reportedly considering deploying ground forces to capture Kharg Island — a key energy hub that handles about 90% of Iran's crude exports. If an agreement is not reached, including reopening the critical Strait of Hormuz shipping route, US forces would target and destroy "all of their electric power plants, oil wells, and Kharg Island, and potentially even desalination facilities."

The Middle East conflict and rising energy prices have sent oil prices soaring, with West Texas Intermediate crude rising 2.8% to $105.8 per barrel, while Brent crude futures for May climbed 2% to $115.17 per barrel. The Indian stock market will remain closed for trading on Tuesday on account of Mahavir Jayanti 2026.

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