Asian shares decline as fresh US-Iran tensions weigh on sentiment
New Delhi, May 28
Asian markets traded lower on Thursday as renewed geopolitical tensions following fresh US military action against Iran weighed on investor sentiment, while oil prices rebounded 4 per cent after sharp losses in the previous session.
In the equity markets, Japan's Nikkei 225 declined over 1 per cent to 63,905, while South Korea's KOSPI declined nearly 5 per cent to 7,841.01.
Hong Kong's Hang Seng index dropped 2.37 per cent or 600 points to 24,727, while China's Shanghai Composite index slipped 0.90 per cent or 36.95 points to 4,056.78.
The selling pressure came after the US military said its forces carried out what it described as defensive operations against Iranian targets after intercepting drones near the Strait of Hormuz.
Reports claim that US Central Command forces shot down four Iranian attack drones and struck a ground control station in Bandar Abbas that was allegedly preparing to launch another drone.
Meanwhile, crude oil prices rebounded sharply in early trade after recording sharp losses on Wednesday. International benchmark Brent crude gained around 4.08 per cent to trade near $100 per barrel, while US benchmark West Texas Intermediate (WTI) crude rose more than 4 per cent to around $92.52 per barrel.
In the US, overnight, major US indices closed steady. The S&P 500 edged up 0.02 per cent to 7,520.36, while the Nasdaq gained 0.07 per cent to close at 26,674.73.
The developments come amid continuing uncertainty surrounding negotiations between Washington and Tehran over reopening the Strait of Hormuz, a critical route for global oil supplies.
Additionally, gold and silver traded lower in international markets on Thursday as a stronger US dollar and renewed geopolitical tensions following fresh US military action against Iran weighed on sentiment and heightened concerns that inflation could remain elevated for longer.
Moreover, domestic equity markets remained closed on Thursday as trading on the BSE and the National Stock Exchange (NSE) was suspended on account of Eid al-Adha.
— IANS
Reader Comments
Honestly, every time there's trouble in the Gulf, we Indians get nervous. So many of our brothers and sisters work there as laborers, nurses, and engineers. We need diplomatic stability, not more conflict. These drone attacks and retaliations just create uncertainty. Our domestic markets being closed for Eid is a small mercy today.
The Strait of Hormuz is literally the world's oil artery; any disruption there sends shockwaves globally. India should accelerate its renewable energy push so we are less dependent on Middle East oil. Also, holding gold might be a good hedge right now since geopolitical tension usually pushes gold up. Smart investors should diversify.
From a global perspective, these tensions feel like deja vu. The S&P 500 barely moved, suggesting US markets are desensitized, but Asia is taking the hit. For us in India, the real pain is in oil prices - crude at $100 barrel means higher import bills, a weaker rupee, and inflationary pressure on everything from food to transport.
Very concerning for the Indian economy. We are already dealing with high inflation and now this. The government must ensure that domestic fuel prices are not hiked immediately. Also, why are our markets closed on a Thursday for Eid but global events don't take a holiday? Our financial system needs better integration with world markets.
This is why India needs to push for strategic autonomy in foreign policy. We cannot keep getting hammered every time there's a US-Iran flare-up. Our energy security is at stake. On a lighter note, at least gold is
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