Asian markets opened lower on Friday as investors reacted to a sharp escalation in Middle East tensions after Israel launched an attack on Iran’s capital. The geopolitical shock also triggered a surge in global oil prices.
US benchmark crude oil jumped by $5.60, or 8.2%, reaching $73.61 per barrel. Brent crude, the international standard, rose by $5.52 to $74.88 per barrel. The conflict-driven jitters were reflected in share markets across the Asia-Pacific region. Tokyo’s Nikkei 225 dropped 1.2% to 37,721.63, while South Korea’s Kospi declined by 0.7% to 2,900.14.
Hong Kong’s Hang Seng Index slipped 0.4% to 23,929.62, and the Shanghai Composite Index dipped 0.2% to 3,394.52. Meanwhile, Australia’s S&P/ASX 200 edged down 0.3% to 8,540.80.
“An Israeli attack on Iran poses a top-ten global risk,” said Xu Tiachen of The Economist Intelligence. “However, Asian markets are likely to recover quickly due to their relatively limited exposure to the conflict and strengthening ties with unaffected Gulf nations such as Saudi Arabia and the UAE.”
Despite the turmoil overseas, US stock markets closed higher on Thursday following a positive inflation report. The S&P 500 gained 0.4% to close at 6,045.26. The Dow Jones Industrial Average rose 0.2% to 42,967.62, while the Nasdaq Composite added 0.2% to 19,662.48.