HONG KONG (AP) — On Friday, Asian stocks experienced a significant retreat as market participants reacted to the escalating tensions in the Middle East, particularly concerning Iran. The recent ceasefire has been strained by missile and drone attacks that led to U.S. retaliatory strikes on Iranian military facilities. While this conflict has adversely affected Asian markets, U.S. futures showed a slight increase amidst the turmoil.
Investors are closely monitoring the ongoing war situation, as negotiations between the U.S. and Iran to establish lasting peace appear to be making slow progress. Iran announced on Thursday that it was still evaluating the latest proposals put forth by the U.S. aimed at bringing an end to the conflict.
In Japan, Tokyo's Nikkei 225 index fell by 1.1% to close at 62,174.12, having reached a record high of 62,833.84 just the previous day. At one point during trading, the index even surpassed the 63,000 mark for the first time. Among several major Japanese stocks, SoftBank Group experienced a notable decline of over 5%.
Other major Asian markets mirrored this downward trend. South Korea's Kospi index also fell by 1.1% to 7,409.63, while Hong Kong's Hang Seng index saw a 1.3% drop to settle at 26,289.50. The Shanghai Composite Index recorded a slight decrease of 0.3%, closing at 4,167.56. Australia's S&P/ASX 200 index lost 1.7%, finishing at 8,729.40. Additionally, Taiwan's Taiex index was down by 0.5%, and India's Sensex experienced a decline of 0.6%.
Amid this tumultuous environment, oil prices rose early on Friday after experiencing a downturn the day prior. Brent crude oil, which serves as the international benchmark, increased by 1.1% to $101.13 per barrel. Before the outbreak of the Iran war in late February, Brent crude was trading at approximately $70 per barrel. Meanwhile, benchmark U.S. crude prices rose by 0.7% to $95.47 per barrel.
On Thursday, the U.S. Central Command reported that it had intercepted "unprovoked" Iranian attacks on Navy ships in the Strait of Hormuz, although no vessels were struck in the incident. U.S. President Donald Trump commented to reporters that the ceasefire agreement with Iran remained intact despite these tensions. Additionally, the United Arab Emirates, an ally of the U.S., reported that its air defenses were "actively engaging" a missile and drone attack early on Friday morning.
The uncertain geopolitical climate and ongoing conflicts suggest that oil and fuel prices will remain elevated, especially since the Strait of Hormuz—a crucial waterway for oil and gas transit—remains largely closed, and a U.S. sea blockade on Iranian ports is still in effect.
In the United States, stock markets experienced a pullback from previous record highs on Thursday. The benchmark S&P 500 index fell by 0.4% to 7,337.11, while the Dow Jones Industrial Average slipped by 0.6% to 49,596.97. The technology-heavy Nasdaq composite saw a minor decrease of 0.1%, closing at 25,806.20. Noteworthy declines included Whirlpool, which sank by 11.9% due to weaker-than-expected results, and Shake Shack, which tumbled by 28.3% for similar reasons. Conversely, McDonald's shares fell by only 0.1% after reporting quarterly revenue that exceeded analyst expectations.
In foreign exchange markets, the U.S. dollar depreciated against the Japanese yen, falling to 156.87 from 156.93. Meanwhile, the euro increased to $1.1729, slightly up from $1.1726.
