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Financial markets in Asia started the week off on weak footing but the situation varies in each country around Asia. Several Asian Countries have shown negative performance due to ongoing war in the Middle East creating anxiety in investors, however Singapore's markets have been stronger and nearing record highs showing a more positive outlook by comparison.
US and Iranian peace talks fell through and the US is coming forward to block the Strait of Hormuz, resulting in very investor sentiment across Asia with increased tensions between US and Iran.
Korea’s Kospi was down nearly 2 percent during morning trading hours and then started bouncing back. Japan’s Nikkei also showed a slight price decline of 0.3 percent. As of 8:45am IST Hong Kong’s Hang Seng was down more than 317 points or 1.22 percent from last week’s closing price to 25,576. Korea's Kospi followed with a 1.14 percent decline for an overall 5,792 closing price.
Japan's Nikkei Index fell by 1 percent while the Shanghai Stock Exchange fell by 8 points to 3,978. The Shenzhen Stock Exchange was positive, up by just over 0.2 percent. Singapore was also negative, down by 0.3 percent but was doing relatively better overall since the start of the conflict, with movements between 4,995 and 4,970.
The geopolitical uncertainty has spurred increases in oil prices; West Texas Intermediate crude for May delivery rose almost 8 percent and Brent crude for June delivery rose by 7 percent- bringing prices above $100 per barrel for both types.
This is a change from last week, when oil had decreased prior to President Donald Trump announcing a 2-week cease fire on March 27, 2014, when equity markets rallied. The ceasefire was short-lived as war continued between Israel and Syria with the Strait of Hormuz largely closed at this time.
In contrast, Singapore's stock markets have held up surprisingly well and they are approaching all-time highs in part due to the performance of the Singapore Dollar compared to other currencies in Southeast Asia.
While both Singaporean and other Asian markets have yet to regain the losses suffered during this time , other domestic factors appear to have been contributing negatively to Singaporean equity performance.
Also Read: Asian Stocks Rise as Oil Fluctuates with Iran Deadline in Focus
For example, Singapore’s Equity Market Development Programme, which was announced last year, is expected to induce billions of dollars into Singaporean equities, thereby increasing stock valuations, and supporting investor confidence.
Also Read: Oil plunges After US, Iran Ceasefire Deal to Reopen Strait of Hormuz
l Lau, a fund manager at Eastspring Investments in Singapore. The EQDP efforts offer valuation support amid the global uncertainty as well, he told Bloomberg. Meanwhile, efforts to stabilise the situation faltered over the weekend, with the United States and Iran failing to reach an agreement.
Also Read: Asian Markets Fall as West Asia Tensions Continue to Rise
The conflict between Iran and the U.S. began on February 28, 2020, and the impact of that dispute has continued to adversely affect financial markets throughout the world for several months.