Iran conflict sparks Asian market selloff

June 11, 2026 (MLN): Asian equity markets retreated sharply on Thursday as investors moved into risk-off mode following renewed U.S. military action against Iran, rising crude oil prices, and concerns over inflation and technology-sector valuations.

South Korea led regional losses, with the Kospi plunging more than 4% in early trade, while the small-cap Kosdaq dropped nearly 3%.

Japan’s Nikkei 225 fell over 2%, accompanied by declines in the Topix index.

Australia's benchmark S&P/ASX 200 also traded lower, while Hong Kong futures pointed to a weaker opening after closing the previous session at higher levels.

The downturn followed a broad selloff on Wall Street, where the Dow Jones Industrial Average tumbled 953 points, or 1.9%, while the S&P 500 and Nasdaq Composite lost 1.6% and 2.0%, respectively.

Investor sentiment was hit by a stronger-than-expected inflation backdrop and fresh geopolitical concerns in the Middle East.

Market anxiety intensified after the United States launched a new round of military strikes against multiple targets in Iran.

According to U.S. Central Command, the operations were conducted as “self-defense strikes” under the direction of President Donald Trump.

The action came after Washington accused Tehran of threatening U.S. vessels in the Strait of Hormuz, while Iran reportedly responded by announcing the closure of the strategic waterway, according to CNBC.

The escalation pushed energy prices higher, with Brent crude rising above $94 per barrel during Asian trading, while U.S. West Texas Intermediate crude advanced toward the $92-per-barrel mark.

The renewed surge in oil added to concerns about inflationary pressures and the potential impact on global economic growth.

Technology shares remained under pressure as investors reassessed the sustainability of lofty earnings expectations that had fueled much of the sector’s rally in recent months.

The markets in South Korea, Taiwan, and the broader Asian technology space appeared particularly vulnerable given their elevated valuations and heavy exposure to the artificial intelligence theme.

Adding to the pressure, shares of Oracle Corporation fell sharply in after-hours trading after the software giant outlined plans to significantly increase spending on artificial intelligence infrastructure.

The company also announced intentions to raise tens of billions of dollars through a mix of debt and equity financing, raising concerns among investors about its future leverage levels.

Strategists said the combination of geopolitical uncertainty, higher oil prices, and stretched valuations is prompting investors to rotate away from high-growth technology stocks toward more defensive sectors.

Healthcare, pharmaceuticals, financials, and energy-related shares have increasingly attracted interest as portfolio managers seek protection from market volatility.

Meanwhile, attention is also turning to key U.S. economic data scheduled for release later on Thursday.

Investors will closely watch the latest producer price inflation figures and weekly jobless claims data for clues on the Federal Reserve’s next policy move.

Expectations for another U.S. interest-rate increase later this year edged slightly higher following the recent inflation readings, although markets remain divided on the timing of any additional tightening, according to Reuters.

European markets were also set for a weaker start, with futures tied to major regional indices pointing lower as investors assessed the implications of the escalating U.S.-Iran conflict and its potential impact on global growth, inflation, and financial markets.

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