Asian Stocks Mixed as Iran War Weighs on Markets
Asian stock markets delivered a mixed performance on Tuesday, as investors continued to assess developments surrounding the U.S.-Israel conflict with Iran. Regional markets remained under pressure, with most indices heading toward significant losses in March due to geopolitical uncertainty.
Japan’s Nikkei 225 and South Korea’s KOSPI emerged as the worst-performing markets in the region for the month, both heavily impacted by a sharp sell-off in major technology stocks.
Wall Street Weakness and Futures Rebound
Asian markets followed the negative lead from Wall Street, where ongoing concerns about the Iran war fueled a broader risk-off sentiment. Investors remained cautious, limiting any strong recovery across the region.
However, S&P 500 Futures surged over 1% late in the session after reports suggested that President Donald Trump may consider ending U.S. involvement in Iran without reopening the Strait of Hormuz.
Despite this, Asian markets showed only a muted reaction, as a continued closure of Hormuz could still disrupt global energy supplies and keep uncertainty elevated.
South Korea’s KOSPI Leads March Losses
South Korea’s KOSPI fell 2.2% on Tuesday, making it the weakest performer in Asia for March, with total losses approaching 17%.
The decline was driven by both geopolitical concerns and heavy selling in major semiconductor stocks, including Samsung Electronics and SK Hynix. Investor sentiment was hit by rising doubts over long-term demand for chips, particularly in the artificial intelligence sector.
Additionally, broader market losses were intensified by profit-taking after strong gains earlier in 2026. Despite March’s downturn, the KOSPI remains up nearly 21% year-to-date.
Chinese Stocks Decline Despite Strong PMI Data
Chinese equity markets also moved lower, with the CSI 300 falling 0.6% and the Shanghai Composite declining 0.4%. Hong Kong’s Hang Seng index dropped 0.4% as well.
This came despite encouraging economic data, as March purchasing managers’ index (PMI) figures showed stronger-than-expected growth in manufacturing activity, alongside unexpected expansion in non-manufacturing sectors.
The data signaled improving business conditions in China, supported by robust exports and continued government backing. Still, Chinese markets are on track to post losses of 6% to 7% for March.
Regional Markets Head for Steep Monthly Losses
Broader Asian markets are set to close March with notable declines, as investors remain concerned about the economic impact of the Iran conflict. Many economies in the region are particularly vulnerable to disruptions in oil and gas flows through the Strait of Hormuz.
Japan’s Nikkei 225 is expected to fall more than 9% for the month, while the broader TOPIX index is down nearly 10%. Japanese equities were also pressured by expectations of further interest rate hikes from the Bank of Japan.
India’s Nifty 50 has declined more than 9% in March, reflecting concerns over the country’s reliance on energy imports. Meanwhile, Australia’s ASX 200 is down around 7% following a recent rate hike by the Reserve Bank of Australia.
Singapore’s Straits Times index proved more resilient, recording a relatively modest decline of 1.6% for the month.
