Asian markets fall as war fears and energy disruptions rattle investors

Investor sentiment across Asia has deteriorated sharply as uncertainty over the duration of the war continues to weigh on financial markets.

Regional equities declined following a major sell-off in the United States, where markets recorded their steepest drop since the conflict began, CNN reports.

Market participants are struggling to interpret mixed and often contradictory signals from Iran and US President Donald Trump, with no clear indication of de-escalation in a conflict that is already disrupting energy shipments through the Strait of Hormuz.

Additional pressure is coming from a fresh inflation warning issued by the Organisation for Economic Co-operation and Development. The OECD has significantly raised its inflation projections for major economies, now forecasting that the average inflation rate across G20 countries will reach 4% this year. At the same time, it has downgraded its global growth outlook, revising it down to 2.9% from 3.3% last year.

Asian economies are expected to be among the most affected, given their heavy dependence on crude oil, natural gas, and other fuels imported from the Middle East.

The impact is already being felt in the Philippines, where transport workers have taken to the streets to protest surging fuel prices. In response, President Ferdinand Marcos Jr. has declared a state of “national energy emergency,” making the Philippines the first country to take such a step amid the current crisis.

The country’s foreign secretary told CNN that the Philippines has only 40 to 45 days’ worth of petroleum supply remaining, underscoring the severity of the situation.

By Tamilla Hasanova