Asia stocks slump as markets brace for energy shock

2026-03-04 - 01:53

SINGAPORE – Asian markets skidded on Wednesday, March 4, with investors cutting crowded positions in gold and chipmakers amid worries that a wider Mideast war could deliver an energy shock, raising inflation and delaying rate cuts. Shares in Seoul .KS11 dived 4%, taking two-day losses beyond 11% as fast-money investors and foreigners bailed out of a market that had soared on memory chipmakers’ vast AI-driven profits. The selloff dragged the won KRW= to a 17-year low. Japan’s Nikkei .N225 slid 2.5% in a third straight session of losses. Japan and South Korea are major energy importers. Benchmark Brent crude oil futures LCOc1 are up more than 12% for the week at $81.40 a barrel, though they came off highs after US President Donald Trump ordered an insurance guarantee on Gulf shipping and said the Navy may escort oil tankers through the Strait of Hormuz if necessary. US and Israeli forces have pounded Iran for four days, and Iranian drones and missiles have struck Gulf oil refineries as well as US embassies in Saudi Arabia and Kuwait. “It does look like the conflict is going to go a little longer than what people thought initially. And there’s been escalation because the war is now broadening to include allies of the US,” said Damien Boey, portfolio strategist at Wilson Asset Management in Sydney. “Oil infrastructure seems to be under attack ... so people are having to think about the duration of all of that.” Gold XAU= fell about 4.5% overnight, and the Aussie dollar AUD= slid 0.8% as traders cashed out of winning bets to cover losses elsewhere in a volatile week. Early in the Asia session, gold steadied at $1,528 an ounce, while US and European futures also tried to stabilize, with S&P 500 futures ESc1 flat and European futures STXEc1 up 0.8%. On Wall Street, indexes pared heavier losses, but the S&P 500 .SPX closed 0.8% lower amid fears of potentially prolonged higher oil prices. “The biggest issue that investors are trying to weigh goes back to the intertwining of inflation and interest rates,” said Chuck Carlson, CEO at Horizon Investment Services in Hammond, Indiana. “Are energy prices going to remain elevated for a longer period than people thought yesterday, and then does that pass through?” The euro EUR= has slid below $1.16 as investors expect Europe will be hit hard by higher energy costs. Benchmark European gas prices TRNLTTFMc1 have jumped about 65% in two days. – Rappler.com Must Read US-Israel vs Iran war: The initial impact on Filipinos in UAE