Asian markets react to Middle East crisis

May 11, 2026 (MLN): Asian markets started the week on a mixed note on Monday, with South Korea’s benchmark index surging to a fresh record high, as investors reacted to rising geopolitical tensions in the Middle East and a sharp jump in global oil prices.

South Korea’s KOSPI rallied 4.70% in early trading, extending gains after hitting an all-time high at the open.

Chip heavyweight SK Hynix jumped over 10% following strong momentum in U.S. semiconductor stocks last week.

Meanwhile, the small-cap KOSDAQ index edged 0.30% lower.

Investor sentiment remained heavily influenced by escalating tensions between the United States and Iran after U.S. President Donald Trump rejected Tehran’s latest proposal aimed at ending the conflict.

According to Iran’s semi-official Tasnim news agency, Tehran submitted a counteroffer to U.S. negotiators seeking a halt to military actions across the region and the removal of sanctions, as reported by CNBC.

However, Trump dismissed the proposal in a Truth Social post, calling it “totally unacceptable.”

Israeli Prime Minister Benjamin Netanyahu further heightened concerns by stating that the conflict with Iran was “not over,” emphasizing that both Israel and the U.S. remain committed to curbing Tehran’s nuclear ambitions.

The worsening geopolitical situation and Iran’s closure of the Strait of Hormuz continued to fuel concerns over global energy supplies, sending oil prices sharply higher.

West Texas Intermediate (WTI) crude futures climbed nearly 4% to $99.18 per barrel, while Brent crude rose 3.49% to $104.83 per barrel in late U.S. trading.

Elsewhere in Asia, Japan’s Nikkei 225 traded slightly lower in volatile trading, while the broader Topix index gained 0.19%. Nintendo shares fell more than 5% after the gaming giant announced plans to raise prices for its Switch 2 console while forecasting weaker sales.

Australia’s S&P/ASX 200 declined 0.83%, pressured by weakness in energy-sensitive sectors.

Chinese equities were comparatively resilient, with the CSI 300 index rising 0.58%, although Hong Kong’s Hang Seng index slipped 0.48%.

Investors also assessed stronger-than-expected inflation data from China, where both consumer and producer prices increased in April amid higher commodity costs linked to the Middle East conflict.

U.S. stock futures also pointed lower, reflecting broader investor caution. Futures tied to the Dow Jones Industrial Average fell 143 points, while S&P 500 and Nasdaq 100 futures each slipped 0.3%.

The cautious start to the week followed a strong performance on Wall Street last week, where the S&P 500 and Nasdaq Composite recorded gains of more than 2% and 4%, respectively, marked their sixth consecutive week of advances.

The Dow Jones Industrial Average also posted a weekly gain, its fifth positive week in the last six.

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