Asian markets edged higher on Monday despite mounting U.S.-Iran tensions over Iran’s seizure of a commercial vessel in the Strait of Hormuz, a key artery for global oil trade.
The dramatic escalation came after Iranian forces fired on two tankers attempting to traverse the strait on Sunday, as confirmed by Tehran’s state media. This latest move heightens a prolonged naval blockade that threatens 20 per cent of the world’s oil supplies, according to Bloomberg data.
In a blunt warning posted online, President Donald Trump warned on Sunday he would “knock out every single Power Plant, and every single Bridge, in Iran” if Tehran did not agree to Washington’s terms to end the conflict. With U.S. warships now reinforcing the Gulf region per Pentagon announcements, fears of all-out confrontation grow.
Yet investors appeared undeterred, driving gains across much of the region. South Korea’s Kospi surged 1.19 per cent, extending its strong start, while the Kosdaq index for smaller companies advanced 1.14 per cent. Japan’s Nikkei 225 climbed 0.88 per cent, bolstered by a weaker yen that boosted exporters, and the broader Topix rose 0.63 per cent. Australia’s S&P/ASX 200 remained virtually unchanged amid mixed mining signals.
In China, results were more subdued. The mainland CSI 300 dipped slightly on property sector drags, but Hong Kong’s Hang Seng index ticked up 0.22 per cent, supported by technology shares.
Beijing’s central bank held its benchmark lending rates unchanged for an 11th straight month, even as Middle East risks inflated energy costs and dimmed growth hopes. This steady policy arrived on the heels of robust first-quarter expansion, with the world’s second-largest economy growing 5 per cent, up from 4.5 per cent previously and hitting the upper edge of yearly targets.
For 2026, leaders outlined a cautious range of 4.5 to 5 per cent, the most modest ambition since the 1990s. Strong exports, up 12 per cent year on year, cushioned weaker domestic demand.
Oil prices moderated after sharp jumps. West Texas Intermediate futures added 6.14 per cent to $89 per barrel by late U.S. trading, while Brent crude gained 5.51 per cent at $95.36, nearing multi-month peaks amid supply worries, per the IEA. Goldman Sachs warns prolonged strait disruptions could add $10 to $15 per barrel, stoking inflation worldwide.