Asian Markets Decline Amid U.S.-Iran Tensions and Oil Price Volatility
Asian stocks fell following Wall Street losses, as escalating U.S.-Iran tensions in the Strait of Hormuz impacted global markets and oil prices.
Asian stock markets declined on Tuesday, mirroring losses on Wall Street, as escalating tensions between the United States and Iran in the Strait of Hormuz impacted global markets. Oil prices, which had surged due to the conflict, retreated slightly.
In Hong Kong, the Hang Seng Index fell 1.3% to 25,757.56, while Australia's S&P/ASX 200 dropped 0.4% to 8,659.90. Taiwan's Taiex, however, gained 0.3%. Trading volumes were lower than usual, with markets in Japan, South Korea, and mainland China closed for holidays.
The Reserve Bank of Australia raised its benchmark interest rate to 4.35%, citing increased fuel and commodity prices driven by Middle East conflicts. This marks the third quarter-percentage-point hike this year, as the bank aims to steer inflation toward its target band of 2% to 3%.
The fragile ceasefire between the U.S. and Iran was tested after the U.S. military reported sinking six Iranian small boats targeting civilian ships, while two U.S.-flagged vessels successfully transited the Strait of Hormuz. Despite U.S. demands for Iran to reopen the strait, it remains largely closed, with the U.S. imposing a sea blockade on Iranian ports. President Donald Trump's "Project Freedom" initiative, aimed at guiding stranded ships through the strait, commenced on Monday.
Brent crude, the international oil benchmark, fell $1.13 to $113.31 per barrel, after surpassing $114 on Monday. Before the conflict began in late February, it was trading near $70. Benchmark U.S. crude declined $2.04 to $104.38 per barrel.
Negotiations for a permanent end to the conflict have stalled. Tensions escalated further when the United Arab Emirates reported an attack from Iran, the first since the ceasefire began last month.
On Wall Street, the S&P 500 slipped 0.4% from its record high to 7,200.75. The Dow Jones Industrial Average fell 1.1% to 48,941.90, while the Nasdaq Composite dropped 0.2% to 25,067.80. Shares of GameStop sank 10.1% after announcing plans to acquire eBay, a company with a market value roughly four times that of GameStop.
The U.S. dollar rose to 157.27 Japanese yen from 157.25 yen. The euro was trading at $1.1680, down from $1.1689.