Asian markets today: Nikkei 225, Kospi fall up to 2% on renewed US-Iran war in the Middle East

Asian markets today: Asian markets traded lower on Thursday, 4 June, mirroring overnight declines on Wall Street, as ongoing tensions between Iran and the U.S. continued to support higher oil prices, raising concerns about energy costs and inflation.

South Korea's Kospi dropped 1.25%, while the small-cap Kosdaq surged more than 3.83% as trading resumed following a public holiday.

Japan’s Nikkei 225 declined 1.74%, retreating after reaching a record high in the previous session, while the broader Topix index fell 1.09%. Australia’s S&P/ASX 200 slipped 1.14%.

Meanwhile, mainland China’s CSI 300 lost 0.84%, and Hong Kong’s Hang Seng Index was down 0.93%.

Back home, Gift Nifty was trading near the 23,346 mark, about 170 points below the previous close of Nifty futures, signalling a weak opening for the Indian stock market.

“The risk-off mood has carried into Asia, where major indices including Japan's Nikkei and South Korea's Kospi are trading firmly in the red,” said Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth.

Why are Asian markets falling today?

Asian markets extended losses after a retreat on Wall Street, where the S&P 500 ended a nine-day winning streak as renewed tensions between the US and Iran weighed on investor sentiment. Meanwhile, Bitcoin dropped below $63,000, marking its lowest level since early February.

Market sentiment improved somewhat early Thursday after the US announced a ceasefire between Israel and Lebanon. The development helped Brent crude reverse a three-day rally, falling more than 1% to around $96.50 per barrel. The Bloomberg Dollar Spot Index also eased, while gold gained 0.8% to roughly $4,470 an ounce amid hopes that the ceasefire could pave the way for a broader resolution to Middle East tensions.

On Wednesday, higher oil prices and continued strength in the US labor market pushed Treasury prices lower, as traders increased expectations that the Federal Reserve may raise interest rates next. However, bonds recovered part of those losses early Thursday, with the yield on the 10-year Treasury declining by one basis point to 4.48%.

In Asia, the yen remained close to the 160-per-dollar mark following remarks from Bank of Japan Governor Kazuo Ueda, which suggested that a rate hike this month remains possible, though not guaranteed.

Wall Street update today

US stock market retreated from record levels on Wednesday as escalating tensions in the Middle East and a surge in crude oil prices heightened inflation concerns, prompting investors to book profits.

All three major US benchmark indices ended the session in the red, weighed down by losses in the financial and technology sectors. The small-cap Russell 2000 lagged behind its large-cap peers.

The Dow Jones Industrial Average declined 620.72 points, or 1.21%, to close at 50,687.07. The S&P 500 fell 56.06 points, or 0.74%, to 7,553.72, while the Nasdaq Composite dropped 239.92 points, or 0.89%, to settle at 26,853.98.

(With inputs from agencies)

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.