Major Asian stock markets opened cautiously on Thursday as investors assessed the escalating conflict in the Middle East, rising energy prices and the potential impact on global trade and inflation.
Tokyo declines as energy costs weigh on sentiment
Japan’s benchmark Nikkei 225 opened lower in early trading as investors reacted to rising oil prices and geopolitical uncertainty linked to the ongoing conflict involving Iran, the United States and regional allies. Energy-intensive sectors such as transportation and manufacturing came under pressure, reflecting concerns that prolonged disruption to Gulf energy supplies could increase production costs across Asia.
The broader Topix index also edged down as investors moved into defensive positions, favouring utilities and domestic service companies over exporters. A weaker yen provided some support to Japanese exporters, but the overall mood remained cautious.
Market participants said that the sharp rise in crude oil prices overnight had raised concerns about inflationary pressures returning across major Asian economies. Japan, which relies heavily on imported energy, is particularly sensitive to prolonged volatility in oil markets.
Chinese markets show resilience
In mainland China, the Shanghai Composite opened marginally higher, supported by gains in state-owned energy companies and infrastructure firms. Investors appeared to be positioning for potential government stimulus should global trade conditions deteriorate.
Technology stocks traded mixed, reflecting ongoing uncertainty around global demand and supply chains. However, analysts noted that Chinese markets have been relatively insulated from the immediate impact of Middle East tensions compared with energy-import dependent economies such as Japan and South Korea.
In Hong Kong, the Hang Seng Index opened slightly lower as international investors remained cautious about risk exposure in emerging markets during periods of geopolitical instability.
South Korea and Southeast Asia cautious
South Korea’s Kospi index opened modestly lower, with semiconductor and technology stocks facing mild selling pressure. Investors are closely watching global demand indicators for electronics and chip exports, a key pillar of the South Korean economy.
Across Southeast Asia, early trading was generally subdued. Singapore’s Straits Times Index opened little changed, while markets in Indonesia and Malaysia saw modest declines in early trading.
Energy companies across the region posted gains as oil prices climbed, reflecting expectations that producers could benefit from supply disruptions.
Geopolitics driving investor behaviour
The primary driver of market sentiment across Asia remains geopolitical risk. The escalation of military activity in the Gulf region has triggered volatility in energy markets and raised concerns about shipping disruptions through critical trade routes.
For Asian economies that rely heavily on imported oil and gas, prolonged instability could translate into higher inflation and slower economic growth.
Despite the uncertainty, analysts note that Asian markets have so far avoided the sharp sell-offs seen during previous geopolitical crises. Investors appear to be waiting for clearer signals about whether the conflict will remain regionally contained or expand further.
As trading continues throughout the day, attention will remain focused on developments in global energy markets, diplomatic responses and signals from major central banks about how they intend to respond to renewed inflation risks.
Newshub Editorial in Asia – March 13, 2026
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