Escalating tensions in the Middle East sent Asian markets sharply lower, with Taiwan stocks falling more than 1,300 points, South Korea's KOSPI triggering a circuit breaker for a second straight session, and Japan's Nikkei suffering a steep morning sell-off. At the same time, Brent crude settled at $81.40 a barrel, its highest level in more than a year.
Asian equities post broad losses
Taiwan's stock market slid past the 33,000 level in early trading on July 4. At the time of writing, the index was at 33,006, down 3.84%. TSMC dropped below TWD 1,900 at the open and touched a low of TWD 1,880, with the stock down about 2.5%. Other major heavyweight names were also in the red.
South Korea saw even heavier selling. The KOSPI fell 8.1% and trading was halted after a circuit breaker was triggered for the second consecutive day. Samsung Electronics and SK Hynix both dropped more than 6%. Since its record high on Feb. 27, the KOSPI has fallen by more than 15%.
Japan was hit as well. The Nikkei plunged more than 2,100 points in morning trade and was down over 3.8% at the time the report was written. The move pointed to a broad risk-off shift across regional markets.
Hormuz closure claim lifts oil prices
Oil prices moved higher after Iran's Revolutionary Guard said on the 2nd that the Strait of Hormuz had been closed and that it would not allow any oil to leave the region. Following that statement, international crude prices rose 4.7% on the 3rd, with Brent crude futures closing at $81.40 per barrel.
Since the conflict broke out over the weekend, oil prices have climbed a cumulative 12%. U.S. President Donald Trump said on Tuesday that he could tolerate higher oil prices for “a period of time,” saying it was more important to eliminate what he described as an “imminent” threat from Iran.