Asian Markets Stressed by Geopolitical Tensions and Elevated Interest Rates

The Asian stock market is experiencing a challenging week with significant declines amidst renewed tensions between the United States and Iran, which have pushed oil prices higher. This scenario has been exacerbated by growing expectations of an interest rate hike in the U.S., making riskier assets less attractive compared to safer alternatives. Major regional indices, such as Japan's Nikkei and South Korea's Kospi, recorded substantial declines, indicating a broad-based shift towards caution across the board. In China, despite a modest rise in manufacturing PMI figures, stock markets remained subdued, with investors focusing more on external uncertainties than domestic positive trends.