Asian stock markets started March in the red, as investors reacted to rising tensions in the Middle East and stronger-than-expected US inflation data. Japan’s Nikkei 225 fell sharply, losing more than 2%, falling more than 900 points by 9:15, before falling 1.5% to 57,947. In Hong Kong, the Hang Seng fell 1.7% to 26,165. Shenzhen was also trading in the red, down 109 points at 14,386.Meanwhile, markets in South Korea remained closed for a public holiday.US futures also slipped, with the S&P 500, Dow Jones Industrial Average and Nasdaq Composite falling more than 1% early, although losses in East Asia pared to 0.6% by mid-morning. Meanwhile, gold, the traditional safe haven, rose sharply amid market uncertainty, with US futures rising 2.58% to $5,382.60 an ounce. Traders are also worried about disruption to oil supplies after attacks on two ships in the Strait of Hormuz, a vital shipping route for global energy. U.S. benchmark crude rose nearly 8% early on the day, gaining 4% at $69.60 a barrel. Brent crude jumped 4.5% to $76.17 a barrel. Energy experts have warned that a prolonged conflict could send prices of other fuels and gasoline rising. Iran, which exports about 1.6 million barrels per day mainly to China, could be forced to cut shipments, forcing buyers to look for alternative supplies. While the situation was largely feared due to the US military build-up in the region, traders have started to adjust to the situation. In currency trading, the US dollar strengthened to 156.29 Japanese yen from 156.04 late Friday, while the euro declined to $1.1788 from $1.1812.
