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BIZ & FINANCE THURSDAY | MAR 5, 2026

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Asian equities in freefall as oil extends gains

HONG KONG: Stock markets across Asia were pummelled yesterday as investors began panic-selling on fears the Israel-US war on Iran will fan inflation and hammer the global economy. The bloodshed’s impact on markets was felt most in Seoul, where the Kospi tanked more than 12% as investors unwound their tech positions built up in recent months on the back of the AI boom. The selling came as oil prices rallied more than 2% on the fifth day of attacks on the Islamic republic, with observers warning that the choking of supplies from the Middle East could fan inflation and shatter hopes for more interest rate cuts. US President Donald Trump pledged that if needed, the navy would escort oil tankers through the Hormuz Strait – through which about a fifth of global oil supplies flow – and ordered Washington to provide insurance for shipping. Iran’s Revolutionary Guards said yesterday the route was “under the complete control of the Islamic Republic’s Navy”. Iranian strikes on several neighbours threatened to broaden the conflict, while uncertainty about how long the war would take added to upward pressure on crude prices, with both main contracts climbing around 3% yesterday. Both main contracts have soared around 15% since Friday, before the attacks began. Brent hit a high above US$85 on Tuesday and West Texas Intermediate topped out near US$88. Some analysts warn they could soon hit US$100. Seoul’s Kospi, which had rattled to multiple record highs since the start of the year on the back of the AI tech boom, was sent reeling. Trading on the index and Kosdaq was halted after they both sank more than 8%, and when business resumed they extended losses. The Kospi crashed more than 12% – after shedding more than 7% on Tuesday – as panic-selling set in. That left the index suffering its worst two-day collapse since 2008 during the global financial crisis. It has also more than halved the near 50% gains enjoyed between the start of the year

o South Korea’s Kospi records worst day since 2008 and Friday. It rose 76% last year. Chip giants Samsung and SK hynix, which have led Seoul’s surge this year, dived 11.7% and 9.6% respectively. “Asian equities are now staring at a third consecutive day of losses and the reason is not mysterious,” wrote Stephen Innes at SPI Asset Management. “When crude edges higher, the invoice lands hardest in Asia, where imported energy is not just a line item but a structural dependency. “Export-driven economies suddenly find themselves recalculating margins with a more expensive barrel sitting quietly in the background of every factory floor and shipping lane.” Chung Hae-chang, analyst at Daishin Securities, added: “Because South Korea, Japan, China and Taiwan rely heavily on energy shipments that pass through the Strait, any blockage would have significant negative effects on the market.” Japan’s Nikkei 225 ended off more than 3%, with chipmakers Advantest and Tokyo Electron losing more than 4%. Elsewhere in Asia, Taipei sank more than 4%. Bangkok tumbled 8% to also spark a brief trading halt. Hong Kong, Sydney, Singapore, Shanghai, Wellington, Mumbai, Manila and Jakarta were also deep in negative territory.

A currency dealer walks past an electronic board displaying the Kospi index and the exchange rate between the US dollar and the won at the dealing room of a bank in Seoul. – REUTERSPIC

already concerned about still-elevated inflation. Analysts said the Federal Reserve, European Central Bank and Asian central banks would likely delay interest rate cuts but the Bank of England as well those in parts of Latin America and Central Europe could be forced to hike. The dollar extended its recent gains fuelled by bets on fewer – and possibly no – rate cuts as well as its safe haven status. – AFP

The selling followed big losses in Europe on Tuesday, where London fell 2.8% but both Frankfurt and Paris dropped by more than 3% – hit by a spike in natural gas prices to their highest levels since Russia’s invasion of Ukraine. However, all three opened slightly higher yesterday. The prospect of energy costs spiking has hammered hopes for any more central bank interest rate cuts as officials were

China’s factory activity slump deepens BEIJING: China’s factory activity slowed in February, official data showed yesterday, missing forecasts and extending a slump just ahead of closely watched announcements on policy planning. The world’s second-largest January, also missing a forecast of 49.2 in a Bloomberg survey of economists. NBS statistician Huo Lihui attributed the slide mainly to slower operations during the Spring Festival holiday, which fell entirely in February this year.

India warns of ‘serious’ economic risk from Mideast conflict

a day before Chinese leaders are set to unveil their new Five-Year Plan at an annual political conclave in Beijing known as the Two Sessions. The announcements expected today will include this year’s annual growth target and defence budget. “Economic activities contracted in the beginning of this year,“ Zhiwei Zhang, President and Chief Economist at Pinpoint Asset Management, wrote in a note after Wednesday’s data. “The government’s policy stance is flexible this year,“ said Zhang, adding that he “(expects) the government to boost investment moderately to mitigate the pressure on the economy” if activity slows further in the months ahead. – AFP government would seek alternative suppliers. Bahlil said Indonesia had enough crude oil supply for three weeks and that it could not import more because the country did not have adequate storage facilities. Indonesia has pledged to purchase US$15 billion of US energy under a newly-signed trade agreement with the United States. President Prabowo Subianto has set a target for Indonesia to achieve energy self-sufficiency within the next five to seven years. – AFP

NEW DELHI: India warned on Tuesday that war in the Middle East threatens the safety of its 10 million citizens in the region and could seriously disrupt the country’s economy. India, the world’s most populous nation and fastest growing major economy, relies heavily on oil imports. New Delhi’s Foreign Ministry said it was monitoring developments with “great anxiety”, saying the safety of its 10 million citizens in the region was an “utmost priority”. “We cannot be impervious to any development that negatively affects them,” ministry spokesman Randhir Jaiswal said in a statement. “Our trade and energy supply chains also traverse this geography. “Any major disruption has serious consequences for the Indian economy.” World oil prices soared more than 8% and European natural gas prices rocketed for a second day running as the war

disrupted exports.

Middle

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“For India, the risks are significant,” Prashant Vasisht from Indian ratings agency ICRA said in briefing note, saying about 50% of India’s crude oil imports, and 54% of liquefied natural gas (LNG) imports, came through the Strait of Hormuz in 2025. “While Indian refiners may be able to source crude oil from alternate locations such as the United States, Africa and South America, elevated energy prices could result in a higher import bill,“ Vasisht said. But Hardeep Singh Puri, India’s petroleum minister, sought to ease concerns. “India has sufficient energy reserves to deal with the ongoing situation,“ he said in a statement. Indian airlines earlier on Tuesday said they were resuming limited commercial services to the troubled region in a bid to collect thousands of stranded passengers. – AFP

economy has battled a slowdown in domestic demand and investment in recent years that have weighed on its vast manufacturing sector. A key measure of industrial health, the manufacturing purchasing managers’ index fell to 49.0 in February, according to the National Bureau of Statistics (NBS), below the 50-point mark that divides expansions and contractions. That figure was down from 49.3 in

However, indices for sectors including “textiles, apparel and automobiles remained below the critical point, indicating weak market activity”, Huo said. China’s non-manufacturing PMI – a gauge of activity across services and construction – was 49.5 in February, a slight improvement from January’s slump. The lacklustre data was announced

Indonesia to import more American crude oil JAKARTA: Indonesia will import more crude oil from the United States to replace supplies from the war-torn Middle East, the archipelago’s energy minister said on Tuesday. 25% of Indonesia’s total crude oil imports come from the Middle East and pass through the Strait of Hormuz.

“For the crude oil we currently take from the Middle East, we are diverting part of it to purchases from the United States, so that we have certainty regarding the availability of our crude oil,“ Bahlil told reporters. Indonesia imports the bulk of the oil it uses, most of it from Nigeria. Bahlil said 30% of Indonesia’s liquefied petroleum gas (LPG) imports also came from the Middle East, and the

Attacks by the United States and Israel on the republic and Iran’s retaliatory strikes in the region have disrupted crude flows, with the crucial Strait of Hormuz – through which about a fifth of global oil transits – effectively closed off. Minister of Energy and Mineral Resources Bahlil Lahadalia said 20% to