Asian Shares Slide As Iran Conflict Spreads Across The Middle East

(RTTNews) - Asian stocks drifted lower on Monday as investors closely monitored escalating West Asian tensions.

The conflict in the region escalated further today after Israel launched airstrikes on Hezbollah targets in Beirut and other parts of Lebanon following projectile fire from Lebanese territory into northern Israel.

U.S. President Donald Trump suggested the conflict with Iran could go on for the next four weeks, raising concerns about a significant widening of hostilities in the region that could severely disrupt the global supply of crude oil and send prices soaring to levels not seen in years.

Barclays has warned that Brent crude prices could reach $100 a barrel in the event of a material supply disruption.

The dollar strengthened in Asian trade while gold jumped more than 2 percent to trade above $5,400 an ounce as the Middle East conflict triggered a broad retreat from risk assets.

Oil prices soared almost 9 percent after at least three ships were attacked near the Strait of Hormuz, which is crucial for the flow of oil to the rest of the world.

Chinese stocks bucked the weak regional trend, with the benchmark Shanghai Composite index rising 0.47 percent to 4,182.59 as national lawmakers and political advisors gather for a key strategic session.

There are expectations of targeted fiscal stimulus from the upcoming National People's Congress.

Hong Kong's Hang Seng index plunged 2.14 percent to 26,059.85, with technology and consumer discretionary stocks leading losses.

Japanese markets lost ground due to uncertainty over the Bank of Japan's policy outlook, increasing anxieties over artificial intelligence and rising concerns about the lack of transparency in private lending.

The Nikkei average fell 1.35 percent to 58,057.24, with air transportation, securities house shares and banks leading declines. The broader Topix index settled 1.02 percent lower at 3,898.42.

Seoul markets were closed for a local holiday. Australian markets recovered from an early slide to end on a flat note as geopolitical uncertainty helped spur demand for gold miners and energy stocks.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index dipped 0.48 percent to 13,656.65, snapping a two-day winning streak.

U.S. stocks fell notably on Friday and notched their largest monthly percentage declines in a year on the back of escalating U.S.-Iran tensions, revived tariff uncertainties and renewed concerns over costs, disruption and layoffs related to artificial intelligence.

Prices paid to U.S. producers rose in January by more than forecast, pointing to lingering inflationary pressures and denting hopes for Federal Reserve rate cuts in the near term.

There were also concerns about possible losses from the collapse of U.K. residential mortgage bridging lender Market Financial Solutions.

The Dow lost 1.1 percent, the tech-heavy Nasdaq Composite shed 0.9 percent and the S&P 500 slid 0.4 percent.