Oil shock impact hit global markets this week as tensions in the Middle East intensified. Investors in Asia sold off tech stocks sharply. Meanwhile, European shares paused their decline amid cautious optimism. The US and Israeli strikes on Iran fueled concerns over energy supply disruptions.
Seoul experienced record losses as the KOSPI index dropped 12 percent. South Korea relies heavily on Middle Eastern oil, which amplified market fears. Over two days, the tech-heavy index lost more than 18 percent of its value. The local currency also fell to a 17-year low. Japan’s Nikkei slid 3.6 percent, and Taiwan stocks dropped 4.3 percent as investors exited semiconductor positions.
Gulf markets showed mixed results. Dubai and Abu Dhabi reopened after a two-day halt due to Iran’s conflict. Saudi Arabia’s benchmark index rose 1.2 percent, led by a 1.3 percent gain in Al Rajhi Bank. Jabal Omar Development advanced six percent following strong annual profits. Flynas jumped 4.3 percent, ending a three-day losing streak. However, Saudi Aramco slipped 2.3 percent as oil prices rose about one percent.
Qatar’s index added 0.8 percent, with Qatar Islamic Bank up 2.2 percent. Industries Qatar eased 0.3 percent after announcing production cuts. Muscat’s index rose 0.4 percent, while Bahrain’s fell 1.3 percent, and Kuwait’s lost 0.6 percent. Egypt’s blue-chip index retreated 0.6 percent.
Investors responded to rising oil prices, which threaten inflation and could delay interest rate cuts. European gas prices fell slightly but remain 60 percent higher than last Friday. Bond markets came under pressure as traders adjusted expectations for higher inflation and delayed rate reductions. The benchmark 10-year US Treasury yield rose to 4.08 percent.
Analysts emphasized that the oil shock impact extends beyond energy markets. Rising costs affect shipping, currency values, and investor confidence worldwide. The euro fell to $1.1650, while the Japanese yen and Swiss franc weakened. Investors increasingly favored money-market funds as safe alternatives.
Market strategists noted that the selloff in Asia shows that risks from energy supply disruptions can spread quickly. They warned that continued Middle East tensions could further affect both tech stocks and broader markets. Traders remain cautious, monitoring developments closely as energy prices and geopolitical risks shape global financial markets.
