Stocks slid, oil prices jumped while the US dollar was steady on Thursday after major escalation in the US-Israeli attacks on Iran rattled investors while hawkish tone from the US Federal Reserve set the stage for the rest of the ⁠central bank meetings.

In Hong Kong, the benchmark Hang Seng Index lost 474.86 points, or 1.82 percent, to open trading for the day at 25,550.

The China enterprises index was 143 points, or 1.6 percent, down at 8,692 while the tech index rounded off the opening 107 points, or 2.1 percent, down at 5,000.

Up north, the benchmark Shanghai Composite Index was down 0.85 percent at 4,028.

The Shenzhen Component Index was 1.3 percent lower at 14,003 while the ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, was down 1.04 percent at 3,311.

In Tokyo, the Nikkei was down 1,468 points, or 2.66 percent, at 53,770 close to noon local time at the same time that the Kospi in Seoul was 119 points, or 2.02 percent, down at 5,805.

The market losses came after Iran accused Israel of striking its facilities in the huge South Pars gas field on Wednesday and vowed to attack oil and gas targets throughout the Gulf, firing missiles at Qatar and Saudi Arabia.

The hits to energy infrastructure sent US crude futures more than 3 percent higher to US$99 per barrel. Natural gas rose over 5 percent, while Brent futures rose to US$111 a barrel in early trading.

"This latest escalation feels like a turning point for markets because the conflict is no longer just about military headlines or Strait ⁠of Hormuz closure," said Charu Chanana, chief investment strategist at Saxo in Singapore.

"It is now hitting the ⁠plumbing of the global energy system. What ⁠is unsettling markets now is the growing stagflation risk... It means this is no longer just a geopolitical story but a macro one."

The US dollar strengthened across the board, also buoyed by the Fed predicting just one more cut ⁠this year, although traders are no longer fully pricing in ‌any easing in 2026.

The dollar index, which measures the US currency against six other units, is up 2.5 percent since the US-Israeli attacks began at the end of February as investors have largely ‌gravitated toward the greenback as the haven of choice.

The index was last at 100, little changed in early trading but holding on to Wednesday's gains.

In a week filled with policy meetings across the globe, investors have been parsing through comments to gauge the impact of the war in the Middle East, with the European Central Bank, Bank of England and Bank of Japan due later in the day. (Reuters & Xinhua)


Edited by Edmond Fong