So it begins! War on Iran spooks investors as markets go into freefall
Global markets fall sharply as the US and Israel attack Iran, oil surges and investors face heightened volatility and uncertainty in Asia.
Israel and the US launched attacks on Iran last weekend, sending shockwaves across global markets and stoking widespread financial anxiety.
Markets were closed during the initial strikes, so investors’ first full reaction came on Monday, March 2 2026.
Uncertainty over the conflict’s length and the risk of disruptions to global energy supplies has made trading highly volatile.
On Wednesday, Asian stock markets tumbled for a third straight day as oil prices surged amid escalating US-Israel strikes on Iran.
South Korea and Thailand temporarily halted trading after their stock indexes plunged more than 8 percent, triggering circuit breakers designed to curb panic selling.
South Korea’s Kospi, the main stock exchange, reflected fragile market sentiment, recording one of its steepest two-day declines in decades, comparable to the 2008 financial crisis.
Kospi closed down 12 percent, while Japan’s Nikkei 225 dropped 3.5 percent.
Hong Kong’s Hang Seng index fell 2.5 percent, and China’s Shanghai Composite declined just under 1 percent, partly cushioned by alternative energy sources.
Other Asian markets also slid, including Taiwan’s TAIEX, down over 4 percent, India’s NIFTY 50, off around 2 percent, and Thailand’s temporarily halted trading.
Western markets
European futures mirrored the declines, with Stoxx 600 and other indexes pointing lower.
US markets have also reacted nervously this week.
Overnight, US and Israeli strikes continued on Iran and Lebanon, while Tehran launched retaliatory attacks on Israel and Gulf nations, including Qatar and the UAE.
Market losses spanned sectors, hitting tech giants such as Samsung Electronics, SK Hynix, and LG Electronics, while energy, shipping, and logistics bore the brunt of the fallout.
As the war enters its fifth day, investors brace for further volatility and potential global energy disruptions.
Markets remain on edge, with investors closely monitoring developments in the Strait of Hormuz and the broader Middle East, aware that any escalation could further destabilise trade and energy supplies.
Threat to the Strait of Hormuz passage
Ships near the strategic Strait of Hormuz, a vital route carrying nearly one-fifth of the world’s oil, faced threats from Iran, stoking further market unease.
Oil prices surged dramatically, with Brent crude jumping up to 13 percent in early trading, reaching $82 per barrel (a 14-month high), and WTI rising similarly to around $72.
Reports predict potential spikes to $100 plus if the war is prolonged.
Brent crude oil jumped nearly 2 percent on Wednesday in trading, nearing $80 per barrel, continuing a two-day surge as tensions in the Middle East disrupted global energy expectations.
US President Donald Trump reassured that the US Navy would protect shipping lanes and provide risk insurance for tankers. But that hasn’t eased market concerns.
Shipping and logistics firms suffered the heaviest hits, with Pan Ocean, HMM, and KSS Line tumbling between 17 and 19 percent amid halted maritime traffic.
South Korea and many other countries rely on imports of fossil fuels, exposing the economy to heightened risk from the ongoing conflict.