Asia report: Stocks fall across region on oil price concerns

(Sharecast News) - Asia-Pacific markets mostly declined on Friday, tracking volatile trading on Wall Street overnight, as escalating tensions in the Middle East and disruptions to energy supply continued to weigh on investor sentiment. Patrick Munnelly, market strategy partner at TickMill, noted, "equity markets experienced turbulence heading into Friday, with investors closely monitoring developments from the US and Israel aimed at easing concerns over tensions with Iran," while "the MSCI Asia Pacific Index fluctuated before slipping 0.2%."

Risk appetite remained fragile despite efforts by US president Donald Trump and Israeli prime minister Benjamin Netanyahu to calm markets, with Trump signalling that no ground troops would be deployed and Netanyahu indicating Israel would refrain from further attacks on Iranian energy infrastructure.

US-aligned nations including Britain, Canada, France, Germany and Japan also issued a joint statement expressing readiness to ensure safe passage through the Strait of Hormuz.

Nonetheless, tit-for-tat strikes on key oil and gas infrastructure kept markets on edge, with Munnelly adding that markets were "display[ing] mixed signals as oil prices take a step back."

Iran's attack on Qatar's Ras Laffan gas facilities - the world's largest LNG complex - compounded supply concerns, with QatarEnergy CEO Saad al-Kaabi stating that the damage could remove around 17% of the country's LNG export capacity for three to five years.

Saudi Arabia warned oil prices could surge beyond $180 per barrel if disruptions persisted into late April, according to the Wall Street Journal.

The broader market fallout also extended to metals, with gold and silver briefly dropping around 5% and 10% respectively before trimming losses.

Reflecting the recent volatility, Munnelly noted that "Brent crude, which had recently hit its highest close since July 2022, retreated to around $107 per barrel."

Chinese markets fall as PBoC stands pat on rates

In mainland China, the Shanghai Composite fell 1.24% to 3,957.05, with Shanxi LuAn Chemical Technology, Jiangsu Sanfangxiang Industry and Hunan Heshun Petroleum each dropping around 10%.

The Shenzhen Component declined 0.25% to 13,866.20.

The People's Bank of China left its loan prime rates unchanged for a 10th consecutive month, with the one-year LPR at 3.0% and the five-year rate at 3.5%, in line with expectations from all 20 respondents in a Reuters survey.

The steady policy stance reflects a more cautious outlook for inflation amid rising global energy prices, while Beijing's slightly reduced 2026 growth target of 4.5% to 5% lessened the urgency for further stimulus, even as recent data showed firmer activity in factory output, retail sales and investment.

Hong Kong's Hang Seng Index dropped 0.88% to 25,277.32, dragged lower by technology stocks, with Xiaomi falling 8.59%, Alibaba Group declining 6.29% and SMIC losing 4.77%.

Munnelly said that "heavyweight Alibaba weighed on the index, with its shares tumbling as much as 6.4% in Hong Kong after disappointing sales figures," adding that "the company's sluggish performance in its core e-commerce division dampened investor sentiment."

In South Korea, the Kospi 100 edged down 0.15% to 6,627.46, with defence-related names under pressure as LIG Nex1 fell 5.84%, Hanwha Techwin lost 4% and Hanwha Systems declined 3.55%.

Equities in the red down under as well

Australian equities also weakened, with the S&P/ASX 200 falling 0.82% to 8,428.40.

Mining stocks led losses as Greatland Resources dropped 7.25%, Alcoa fell 7.18% and Vault Minerals declined 6.05%.

In New Zealand, the S&P/NZX 50 slipped 0.47% to 12,989.99, with Oceania Healthcare down 4.52%, Precinct Properties New Zealand losing 4.5% and Vista Group International falling 3.99%.

Japan's markets were closed for the Vernal Equinox Day holiday, with Munnelly noting that "trading activity in Asia slowed due to holidays in Indonesia, Malaysia, and the Philippines, while Japanese markets remained closed."

Dollar strengthens as oil prices fall back slightly

In currency markets, the dollar strengthened, rising 0.56% on the yen to trade at JPY 158.62, as it gained 0.13% against the Aussie to AUD 1.4128 and advanced 0.06% on the Kiwi to NZD 1.7033.

Oil prices, after recent sharp gains, eased slightly, with Brent crude futures last down 0.8% on ICE at $107.78 per barrel and the NYMEX quote for West Texas Intermediate falling 1.03% to $95.15.

Reporting by Josh White for Sharecast.com.