Geopolitical Shock Triggers Sharp Selloff in Asia – Asia Market Wrap
Asian equities suffered their steepest drop in almost a year, led by South Korea’s sharpest market slump since the 2008 global financial crisis, as escalating worries over the Iran conflict drove investors out of some of this year’s top-performing markets.
The MSCI Asia Pacific Index fell as much as 4.5%, with South Korean shares tumbling up to 12% amid widespread selling. Prior to the rout, the Kospi — seen as a flagship benchmark for AI-driven investments — had been the best performer globally. Japanese stocks declined 3.7%, Hong Kong lost 2.6% and Indian equities dropped 2%. In the Middle East, Dubai shares slid 4.7% as trading reopened.
Despite the sharp downturn in Asia, futures indicated only limited losses ahead for US and European markets.
The heavy selling in the region contrasted with relatively steadier moves elsewhere after President Donald Trump offered reassurances about protecting shipping routes through the Strait of Hormuz, helping to ease some anxiety.
Brent crude advanced 2.1%, following gains of 4.7% and 7.3% in the previous two sessions, while gold rose 1.4%. The dollar strengthened 0.2%. US government bonds edged lower, with the 10-year yield ticking up one basis point to 4.07%, after earlier turbulence in debt markets this week.
