Asian stock markets opened mostly lower on Monday as renewed fighting between the United States and Iran pushed oil prices higher and increased concerns about inflation, interest rates and global economic growth.
Oil shock unsettles investors
Brent crude climbed approximately 2.7 per cent to above $90 a barrel after fresh military exchanges in the Gulf. The escalation revived fears of disruption to energy supplies through the Strait of Hormuz and created additional pressure for oil-importing economies across Asia.
Market sentiment was also weakened by comments from Federal Reserve Chair Kevin Warsh, who emphasised that further action may be needed to control inflation. Investors raised the estimated probability of a US interest-rate increase in September to around 57 per cent.
Japan and South Korea retreat
Japan’s Nikkei 225 fell around 0.4 per cent in early trading, with technology and semiconductor shares among the weakest performers. Expectations of higher US interest rates pushed bond yields upwards, while the dollar remained close to 160 yen.
South Korea’s Kospi also opened lower, while the broad MSCI index of Asia-Pacific shares outside Japan declined approximately 0.6 per cent.
China presents a mixed picture
Mainland Chinese markets were divided. The Shanghai Composite gained around 0.4 per cent, but the CSI 300 index of major Chinese companies fell approximately 0.4 per cent.
Property shares came under particularly heavy pressure after Beijing introduced new mortgage and housing-finance regulations. The CSI 300 property index lost around 2 per cent, while an index of Chinese developers listed in Hong Kong fell by more than 4 per cent.
China’s official manufacturing purchasing managers’ index improved to 49.8 in August from 49.2 in July. However, a reading below 50 continues to indicate contraction.
India and Australia face cautious trading
India’s Sensex opened approximately 190 points lower, while the Nifty 50 lost around 105 points. Higher oil prices weighed heavily on sentiment because India imports most of its crude requirements.
Australia’s ASX 200 also started cautiously, although gains among banks and energy companies helped offset weakness in mining shares.
Markets watch oil and US policy
Investors will closely monitor developments in the Gulf, the direction of oil prices and signals from the Federal Reserve. US employment data due later this week could determine whether expectations of a September rate increase strengthen further.
Newshub Editorial in Asia – 31 August 2026
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