- The geopolitical situation in the Middle East has escalated again, causing turbulence in the energy and technology sectors. The United States launched a new round of airstrikes on Iran, and Iran announced the blockade of the Strait of Hormuz, leading to an increase in crude oil prices by more than $1 per barrel. The MSCI Emerging Markets Asia Index fell by 0.8 percentage points.
- Major semiconductor manufacturers in Asia are facing valuation adjustment pressures. The Taiwan stock market fell by 2.3 percentage points overall, with TSMC down by 1.1 percentage points. Both Samsung Electronics and SK Hynix saw intraday declines of more than 2 percentage points, reflecting the transmission of risk aversion to high-valuation technology assets.
- In the foreign exchange market, currencies of emerging Asian economies are generally under pressure. The Indonesian rupiah weakened to 17,970 against the US dollar, giving back some of the gains previously driven by the Bank of Indonesia's unconventional rate hike. The Korean won, New Taiwan dollar, and Indian rupee also saw varying degrees of decline against the US dollar.
Geopolitical Deterioration Drives Up Energy Costs
The direct impact of the United States launching a new round of airstrikes on multiple targets in Iran has significantly worsened the security situation in the Middle East. As a countermeasure, Iran officially announced the blockade of the Strait of Hormuz, a crucial international oil transport route. This latest development in geopolitical conflict quickly spread to the commodities market, pushing international crude oil prices up by more than $1 per barrel. The rising risk of energy supply disruptions not only exacerbates the uncertainty of global inflation expectations but also imposes dual pressure on Asian emerging market economies that heavily rely on energy imports. The trend of capital flowing into safe-haven assets has noticeably strengthened in the short term.
Core Technology Assets Face Valuation Adjustments
The sharp escalation of geopolitical risks has rapidly spread to the global semiconductor and artificial intelligence supply chains. After accumulating significant gains in the previous period, core technology stocks in Asia are facing profit-taking. The Taiwan Weighted Index fell by 2.3 percentage points overall, with the stock price of chip manufacturing giant TSMC (2330:TW) down by 1.1 percentage points. The Korea Composite Stock Price Index (KOSPI:KS) initially plummeted by 4.4 percentage points at the opening, then narrowed its decline to about 0.3 percentage points. Leading Korean technology companies Samsung Electronics (005930:KS) and memory chip manufacturer SK Hynix (000660:KS) both saw declines of more than 2 percentage points, highlighting the vulnerability of high-valuation technology sectors in the face of macroeconomic uncertainty.
Regional Currency Assets Under General Pressure
In the foreign exchange market, alongside the phased strengthening of the US dollar index, Asian emerging market currencies have generally weakened against the US dollar. The Indonesian rupiah softened to the level of 17,970 rupiah against the dollar. Previously, the Bank of Indonesia (BI) had taken unconventional rate hike measures, which had driven major bank stocks to rise for two consecutive days and led to a cumulative rebound of 10 percentage points in the Jakarta Composite Index (COMPOSITE). However, due to the impact of this round of geopolitical shocks, the Indonesian stock market fell by 1.5 percentage points, ending the previous rebound trend. Meanwhile, although the Korean won fell to 1,526 won against the dollar, it maintained an overall upward trend this week; the New Taiwan dollar fell to 31.702 against the dollar, and the Indian rupee also weakened to 95.63 against the dollar.
Market Fatigue Shows as Reactions Gradually Stabilize
Although geopolitical conflicts have caused asset price fluctuations in the short term, many market analysts point out that investor sentiment has not spiraled into panic. Lloyd Chan, Senior Currency Analyst for Asia at MUFG Global Market Research, stated that the slight declines in major Asian stock indices and exchange rates indicate that investors, after experiencing the intense volatility at the beginning of the week, have shown a certain degree of fatigue towards ongoing geopolitical changes. The marginal reaction to negative shocks is gradually stabilizing. If the Middle East situation does not further deteriorate, market pricing mechanisms may refocus on the fundamental data of various countries. If core inflation pressures rebound due to rising oil prices, the policy paths of major economies' central banks may face reassessment risks.
