Global markets rattle after US strikes on Iran; West Asian markets defy the trend

Global markets kicked off the week on a turbulent note after the United States launched coordinated strikes on three Iranian nuclear sites, sending shockwaves across equity, commodity, and currency markets. The Asia-Pacific region bore the brunt of the market reaction on June 23, with major indices across the region posting losses as oil prices spiked and investor sentiment turned risk-averse.

Japan’s Nikkei 225 declined 0.56 per cent, while the broader Topix shed 0.49 per cent. In South Korea, the Kospi slid 1.05 per cent, and the tech-heavy Kosdaq dropped 1.78 per cent. Hong Kong’s Hang Seng fell 0.58 per cent, and mainland China’s CSI 300 index lost 0.4 per cent. Meanwhile, Australia’s S&P/ASX 200 fell by 0.76 per cent as commodity stocks came under pressure due to inflation concerns.

Oil prices surged on fears of further escalation in West Asia. Brent crude rose 2.14 per cent to trade at $78.66 a barrel, while West Texas Intermediate (WTI) crude climbed 2.23 per cent to $75.47.

Analysts warned that any move by Iran to disrupt shipping through the critical Strait of Hormuz—a transit point for nearly 20 per cent of global oil—could drive Brent prices past $100 per barrel. US equity futures also turned negative in early Asia hours. Futures linked to the Dow Jones Industrial Average fell by 109 points, or 0.3 per cent, while S&P 500 and Nasdaq 100 futures declined by 0.3 per cent and 0.4 per cent, respectively.

West Asian markets rally on optimism of Iran setback

In stark contrast to the global downtrend, stock markets in Israel and some Gulf countries posted notable gains. Investors in the region viewed the US and Israeli strikes as a strategic victory that may weaken Iran’s nuclear ambitions and delay any immediate retaliation, leading to a short-term boost in confidence.

Israel’s Tel Aviv 125 index surged 1.8 per cent on June 22, pushing its weekly gains to nearly 8 per cent. The benchmark TA-35 index climbed 1.5 per cent. The positive sentiment follows last week’s Israeli strikes on Iranian military and nuclear infrastructure, which preceded the American attacks.

Markets in other parts of the Gulf also edged higher. Kuwait’s Boursa Premier Market Index rose by nearly 1 per cent, while Oman’s MSX30 Index gained 0.5 per cent. Analysts attributed the rally to hopes that Iran’s ability to project power has been temporarily curbed, potentially opening the door to improved regional security alignments.

Indian equities slide sharply amid global selloff

Indian equity markets mirrored the broader regional sentiment in Asia, with benchmark indices registering steep losses in early trade on June 23.

The BSE Sensex crashed over 900 points, opening at 81,704.07 and hitting a low of 81,476.76. The Nifty 50 slipped below the 24,850 mark, falling more than 1 per cent to an intraday low of 24,824.85.

Analysts pointed to weak global cues, spiking oil prices, and a strengthening US dollar as the primary drags on sentiment.

The rising dollar index, which jumped nearly 0.5 per cent, added to foreign outflow concerns, pressuring Indian equities further. Market participants also flagged fears that sustained high energy costs could erode corporate margins and delay India’s economic recovery momentum.

Bitcoin sinks as crypto markets react to geopolitical uncertainty

Digital assets were among the first to react to the geopolitical shock, with Bitcoin plunging below the $99,000 level over the weekend—its lowest point in more than a month. The cryptocurrency has since rebounded slightly, trading just under $101,000.

Ether also experienced a sharp decline, falling over 10 per cent at one point before paring some losses to settle down around 2.5 per cent. Other major cryptocurrencies such as Solana, XRP, and Dogecoin recorded similar sell-offs, dragging down the broader digital asset market.

The crypto crash was attributed to a combination of rising inflation fears, potential interest rate volatility, and forced liquidations on derivatives platforms. More than $1 billion in crypto positions were wiped out over a 24-hour span, the vast majority of them from overleveraged long positions.

Safe havens: Dollar gains, gold shows mixed signals

The US dollar rose broadly against Asia-Pacific currencies, benefiting from its safe-haven status amid heightened geopolitical risk.

The dollar index climbed 0.26 per cent to 98.969 by mid-morning Singapore time, strengthening against major currencies such as the Japanese yen, Chinese yuan, and South Korean won.

The yen weakened 0.31 per cent to 146.52 per dollar, while the South Korean won depreciated 0.45 per cent to 1,380.20. In Southeast Asia, the Philippine peso hit a new low since early April, weakening by 0.78 per cent to 57.573, while the Malaysian ringgit fell 0.64 per cent to 4.2779. The Indonesian rupiah and Thai baht also weakened significantly.

Gold, another traditional safe-haven asset, was little changed after an initial surge, trading down 0.1 per cent to $3,363 per ounce. The muted reaction suggests that while investors are cautious, they are not yet pricing in a prolonged or catastrophic geopolitical crisis.

Markets now await potential Iranian retaliation, with particular focus on the security of the Strait of Hormuz.

With oil near five-month highs, equity volatility rising, and speculative assets retreating, global markets may be entering a phase of higher uncertainty and tighter financial conditions, unless geopolitical tensions de-escalate.