Asian equities recorded their steepest decline in nearly a year, with South Korea experiencing its sharpest sell-off since the 2008 global financial crisis, as concerns over escalating tensions involving Iran sparked widespread market panic.
The MSCI Asia Pacific Index fell as much as 4.5%, while South Korean stocks tumbled nearly 12%. Before the downturn, the Kospi Index had been the world’s best-performing gauge, largely driven by AI-related investments.
Other regional markets also suffered significant losses. Japan saw shares drop 3.7%, Hong Kong declined 2.6%, India fell 2%, and Dubai slipped 4.7% as trading resumed.
Market analyst Hebe Chen of Vantage Global Prime described the downturn as “a toxic cocktail — surging energy prices, a resurgent dollar, and geopolitical tensions that nobody is sleeping through anymore. This isn’t just a technical pullback but more of a psychological capitulation.”
While Asian stocks fell sharply, equity-index futures suggested only modest losses for the US and European markets. In commodities, Brent crude rose 2.1%, after gains of 4.7% and 7.3% over the previous two days. Gold also increased by 1.4%, while the Bloomberg Dollar Spot Index climbed 0.2%.
US Treasuries saw minor weakening, with the yield on the benchmark 10-year note edging up one basis point to 4.07%, following earlier declines in bond markets. The sell-off comes despite reassurances from Donald Trump that shipping through the Strait of Hormuz would remain safeguarded, calming some investor nerves.
