Asian Markets React to Middle East Tensions and Oil Price Surge

Asian stock markets plummeted on Wednesday following heightened geopolitical tensions from Iran's missile strike on Israel, which threatened wider conflict and supply disruptions. Oil prices surged, while investors moved to safer assets like U.S. Treasuries and gold. Hong Kong's market rose, lifted by Beijing's stimulus efforts, amidst generally fragile investor sentiment.

Asian stock markets tumbled on Wednesday, rattled by heightened geopolitical tensions following Iran's missile strike on Israel. Fears of a broader regional conflict and oil supply disruptions sent crude prices soaring, prompting investors to seek refuge in safer assets such as U.S. Treasuries and gold, which traded near record highs.

In the currency market, the dollar remained strong, supported by robust U.S. job data and expectations of limited Federal Reserve interest-rate cuts. Japan's Nikkei dropped 2%, and South Korea's KOSPI was down 0.6%, contrasting with a 6% rise in Hong Kong's Hang Seng Index, buoyed by ongoing stimulus from Beijing. MSCI's broadest index of Asia-Pacific shares gained 0.6% despite overall cautious sentiment.

Mainland Chinese markets were closed for the Golden Week holiday, while trading in Taiwan was halted due to a typhoon. U.S. S&P 500 futures were slightly down, while European STOXX 50 futures pointed upwards. Geopolitical developments between Israel, Iran, and potential retaliatory measures kept the market on edge, with analysts like Chris Weston of Pepperstone highlighting the significant risks involved.

(With inputs from agencies.)