Geopolitical Tensions Surge as Iran Closes Strait of Hormuz, Rattling Asian Markets

Asian stock markets ended mostly lower on Thursday, erasing previous gains as optimism surrounding a U.S.-Iran ceasefire evaporated. The downturn was triggered by Iran's decision to close the Strait of Hormuz, a critical global oil transit point, after claiming the U.S. breached the terms of a two-week truce. Iranian Parliament Speaker Mohammad-Bagher Ghalibaf stated that three clauses of the proposal had been contravened. The escalation comes amid a volatile geopolitical landscape where U.S. President Donald Trump has warned of "strong action" and maintained military deployment in the region. Simultaneously, ongoing Israeli military operations in Lebanon have further complicated peace efforts, with U.S. Vice President JD Vance clarifying that Lebanon was excluded from the ceasefire agreement. Market reactions were swift and widespread. Brent crude surged over 3% to approach $98 per barrel, while gold remained elevated above $4,700 per ounce. In Asia, the Nikkei 225 fell 0.73% to 55,895.32, and the Kospi dropped 1.61% to 5,778.01, with tech giants Samsung Electronics and SK Hynix both sliding more than 3%. While Australian and New Zealand markets saw marginal gains, the broader sentiment remains bearish. The volatility is compounded by Federal Reserve minutes suggesting that rising inflation may necessitate future rate hikes, adding further pressure to global equity valuations as investors pivot toward safe-haven assets.