Global financial markets opened the week under heavy geopolitical pressure on Monday after military strikes against Iran triggered fears of a wider Middle East conflict, sending oil prices sharply higher while equities retreated across several major exchanges.
Energy shock drives the first reaction
The most immediate response in global markets came from the energy complex. Crude oil prices surged as investors priced in the risk of disruption to supplies moving through the Strait of Hormuz, one of the world’s most critical energy chokepoints through which roughly a fifth of global oil trade passes. Brent crude briefly climbed above $80 per barrel after jumping more than 10 percent in early trading, reflecting concerns that tanker traffic and regional production could be affected if the conflict escalates.
The spike in oil prices was accompanied by sharp increases in natural gas and electricity prices in Europe as markets reassessed the risk to Gulf energy infrastructure and global shipping routes.
Energy companies were among the few equity sectors to gain in early trading, as higher oil prices typically boost the outlook for exploration and production firms. Some oil producers’ shares rose several percentage points as the commodity rally lifted expectations of higher revenues.
Asian markets open in the red
When markets opened in Asia on Monday morning, the initial reaction was broadly negative. Japan’s Nikkei index fell sharply, dropping roughly 900 points during the session, while Hong Kong’s Hang Seng Index declined more than two percent.
The losses reflected a classic “risk-off” move by investors seeking to reduce exposure to equities amid geopolitical uncertainty. Technology and financial stocks led the declines, while defence companies and energy firms saw selective gains as markets reassessed potential winners and losers from the conflict.
Chinese markets proved more resilient, partly because the rally in energy producers offset declines elsewhere in the market.
European exchanges follow the downturn
European markets opened lower later in the morning as the shockwave spread westward. Major indices including the FTSE 100, Germany’s DAX and France’s CAC 40 all fell between roughly one and two percent as investors reacted to the surge in energy prices and the possibility of prolonged regional instability.
Airline and travel stocks were among the hardest hit, reflecting cancelled flights and rising fuel costs, while insurance and shipping companies also came under pressure due to heightened risks in the Gulf region.
Safe-haven assets surge
Alongside the fall in equities, investors moved into traditional safe-haven assets. Gold prices rose strongly as global funds sought protection from volatility, climbing several percent in early trading.
The US dollar also strengthened against several currencies as capital flowed toward perceived safer assets in times of geopolitical stress.
Bond markets showed mixed reactions, balancing safe-haven demand with concerns that rising oil prices could fuel inflation and delay interest-rate cuts by major central banks.
Markets price the geopolitical risk
Financial markets are highly sensitive to Middle East tensions because of the region’s central role in global energy supply. Any disruption to the Strait of Hormuz — the narrow passage between Iran and Oman — can quickly affect global oil flows and transportation costs.
Analysts say the scale of the market reaction will depend largely on whether the conflict remains limited or expands into a broader regional confrontation involving Gulf states or major powers.
For now, Monday’s market moves illustrate a familiar pattern: equities weaken, commodities surge and safe-haven assets rally whenever geopolitical shocks threaten global trade and energy supplies.
Whether the volatility proves temporary or evolves into a sustained market trend will likely depend on developments in the coming days and the stability of oil flows through the Persian Gulf.
Newshub Editorial in Asia — March 2, 2026
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