Geopolitical Tensions Surge as Strait of Hormuz Closure Threatens Asian Markets

Asian markets are bracing for a volatile start to the trading week as the Strait of Hormuz was shut down again over the weekend, erasing the optimism that fueled a recent rally in global equities. The sudden shift in the geopolitical landscape is expected to put immediate pressure on Chinese bourses, reversing recent gains. The Shanghai Composite Index (SCI) ended Friday's session slightly lower at 4,051.43, snapping a five-day winning streak in which it had rallied nearly 90 points. While U.S. markets closed at session highs on Friday, the renewed instability in the Middle East is likely to overshadow those gains for traders in Asia. Friday's strength on Wall Street—where the Dow jumped 868.71 points and the NASDAQ rose 1.52%—was driven by a temporary ceasefire between Israel and Lebanon and Iran's brief declaration that the Strait was open to commercial traffic. This temporary reopening had caused West Texas Intermediate (WTI) crude to plummet 10.58% to $84.11 per barrel, easing global supply concerns. The renewed closure of this critical oil chokepoint is expected to trigger a reversal in sentiment, particularly for energy and resource stocks. In China, these sectors already showed weakness on Friday, with Sinopec tumbling 1.77% and PetroChina declining 1.03%, though property stocks provided a minor offset to the losses.