Asia markets slide on oil price surge

June 04, 2026 (MLN): Asian markets traded lower on Thursday as investors reacted to rising geopolitical tensions in the Middle East and persistently high crude oil prices, which renewed concerns over global inflation and economic growth.

Regional sentiment remained fragile after overnight losses on Wall Street, with market participants closely monitoring developments involving the United States, Iran, and Israel.

The latest escalation in the region has fueled fears of potential disruptions to energy supplies, keeping oil prices near multi-month highs.

Japan led regional declines, with the Nikkei 225 retreating 1.77% after reaching a record high in the previous session, while the broader Topix index fell 1.33%.

Investor sentiment was further dampened by a sharp decline in shares of SoftBank Group, which plunged more than 11% following reports that the company sold a 3.25% stake in Indian eyewear firm Lenskart Solutions through a block transaction.

In South Korea, the benchmark Kospi index dropped 1.24%, although the small-cap Kosdaq bucked the broader trend and surged 2.61% as trading resumed after a public holiday.

Australian equities also came under pressure, with the S&P/ASX 200 losing 1.30%., according to CNBC.

Chinese markets were comparatively resilient but remained in negative territory. Mainland China's CSI 300 index declined 0.58%, while Hong Kong's Hang Seng Index fell 1.49%.

In India, the Nifty 50 slipped 0.30%, and the BSE Sensex eased 0.33%.

Investor caution intensified after reports of heightened military activity involving Iran and U.S. forces.

Markets were also digesting comments from Israeli Prime Minister Benjamin Netanyahu, who indicated that both Israel and the United States remain prepared to take further action against Iran if circumstances require.

The geopolitical uncertainty has kept energy markets on edge. U.S. benchmark West Texas Intermediate (WTI) crude settled above $96 per barrel on Wednesday after gaining more than 2%, while Brent crude closed near $98 per barrel following an almost 2% increase.

Although both contracts edged lower in early Thursday trading, prices remained elevated compared with recent weeks.

The risk-off mood extended to U.S. futures trading, where contracts linked to the S&P 500 and Nasdaq 100 fell 0.5% and 0.6%, respectively, while Dow futures were little changed.

Overnight in the United States, the Dow Jones Industrial Average tumbled 620.72 points, or 1.21%, to close at 50,687.07.

The S&P 500 lost 0.74% to end at 7,553.68, while the Nasdaq Composite declined 0.89% to 26,853.98 as investors weighed the potential economic impact of rising energy prices and escalating geopolitical risks.

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