Asian stock markets fell for a third day in a row on Wednesday and oil prices edged higher as investors watch developments in the US-Israel war with Iran.
In choppy trade, South Korea’s Kospi index was 6% lower in early trading. Japan’s Nikkei 225 was more than 3% lower, while the ASX 200 in Australia was down by 1.8%.
Brent crude oil was about 1.5% higher in Asia morning trade after surging over the last two days.
The conflict in the Middle East has rattled financial markets and global energy prices have soared this week after vessels near the crucial Strait of Hormuz shipping lane have come under attack.
Around a fifth of the world’s oil and gas usually flows through the narrow waterway between Iran and the United Arab Emirates (UAE), but traffic has almost entirely halted following Iran’s threats to “set fire” to ships.
Traffic through the strait has almost completely halted following Iran’s threats.
On Tuesday, President Donald Trump said the US Navy will protect ships in the region “if necessary” in a bid to stop the energy supply crunch sparked by the war.
He said Washington will provide risk insurance “at a very reasonable price” to all shipping firms in the region to “ensure the FREE FLOW of ENERGY to the WORLD”.
Stock markets have fallen sharply since the US and Israel attacked Iran over the weekend.
Tehran has retaliated with strikes across the Middle East, causing major disruption to shipping and commercial flights.
The conflict has weighed heavily on the shares in export-reliant countries like South Korea and Japan, which are especially vulnerable to geopolitical shocks that put shipments at risk.
By BBC News
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