Major Asian stock markets closed lower on Monday, June 23, as tensions escalate in the Middle East. Oil prices briefly surged to five-month highs.
Japan’s Nikkei 225 slipped 0.13% to 38,354.09. The broader Topix index dropped 0.36% to 2,761.18.
In South Korea, the Kospi fell 0.24% to 3,014.47, while the small-cap Kosdaq declined 0.85% to 784.79.
Australia’s S&P/ASX 200 also edged down 0.36% to 8,474.9.
India’s Nifty 50 dropped 0.56%, and the BSE Sensex fell 0.62%.
Hong Kong’s Hang Seng Index bucked the trend, rising 0.67% to 23,689.13. Mainland China’s CSI 300 also gained 0.29% to 3,857.90.
Oil prices surged in early trading. Brent touched $81.40 per barrel, and WTI hit $78.40—both the highest since January--before losing gains, turning negative and recovering to 1% gain, Reuters reported.
Later in the day, Brent crude futures were up 85 cents, or 1.1%, at $77.86 a barrel by 1126 GMT, added the Reuters report. "US West Texas Intermediate crude rose by 84 cents, or 1.14%, to $74.68."
Brent has climbed about 11% since the Israel-Iran conflict escalated on June 13. WTI has seen similar gains.
The United States striked three Iranian nuclear sites early Sunday. President Donald Trump called it a “historic moment for the United States of America, Israel, and the world,” while the move drew criticism from China, Russia and a chorus of Arab states. Melissa Parke, executive director of the Nobel Peace Prize-winning International Campaign to Abolish Nuclear Weapons (ICAN), too, condemned the strike as “senseless and reckless.” She added that the US action violated international law and would not resolve nuclear disputes.
Read: US Urges China to Keep Iran from Shutting Key Trade Route
Despite the heightened geopolitical risk, broader market movements remained largely contained. The US dollar firmed slightly as investors turned to safer assets. Bond markets showed little panic.
Investors now weigh on Iran’s response. Iranian state media reported that Parliament has voted to block the Strait of Hormuz in retaliation. The measure, however, requires approval from the Supreme National Security Council.
Analysts warned that any disruption in the Strait could rattle markets. The narrow passage handles about a quarter of the world’s oil shipments and 20% of global liquefied natural gas trade.
Historically, regime change and conflict in West Asia have pushed oil prices sharply higher, analysts warned.
US Secretary of State Marco Rubio has urged China to help prevent Iran from shutting down the vital waterway.
Reuters, citing Goldman Sachs, has reported that Brent could briefly spike to $110 per barrel if oil flow through the Strait of Hormuz were halved for a month. Prices could then remain 10% lower for the following 11 months.
