Global markets are in turmoil as the Iran-Israel conflict escalates, sending shockwaves through the Asia-Pacific region. On Wednesday, stocks in the region experienced a third consecutive day of decline, with the Kospi index in South Korea plunging over 10% after a temporary trading halt. This circuit breaker, designed to prevent panic selling, was triggered for the first time since August 2024. Japan's Nikkei 225 and Australia's ASX 200 also took a hit, dropping 3.9% and 1.8%, respectively. The turmoil extends beyond the region, with oil prices rising 0.7% in Asian morning trade after a two-day surge. This surge is attributed to the ongoing conflict in the Middle East, where vessels near the Strait of Hormuz, a critical shipping lane, have faced attacks. The strait, a vital passage for a fifth of the world's oil and gas, has seen traffic nearly halt due to Iran's threats. The situation has sparked concern over the free flow of energy to the world, with the US offering risk insurance to shipping firms. The conflict has disrupted shipping and commercial flights across the Middle East, impacting export-dependent countries like South Korea and Japan, which are highly susceptible to geopolitical risks.
