Another "Black Monday"? The escalation of Middle East conflicts shocks the Asia-Pacific markets as both Japanese and South Korean stocks plunge.

China Financial News (3月30日) (Editor: Bian Chun) On Monday, as signs emerged that the tensions in the Middle East were showing further signs of escalation, Asia-Pacific stock markets fell sharply, with the Korean and Japanese markets leading the decline across the region.

Korea’s KOSPI index opened down 4.93%, with the drop briefly widening to more than 5%. As of the time of publication, it was down 4.36%, at 5201.96 points. The Korea Kosdaq index fell by nearly 4%.

In terms of heavyweight stocks, chipmakers led the decline. As of the time of publication, Samsung Electronics was down nearly 4%, while SK Hynix fell by more than 6%.

Japan’s Nikkei 225 index opened down 2.49%, and at one point during the session it plunged by more than 5%. As of the time of publication, the decline was 4.63%, to 50903.45 points. The TOPIX index fell 4.1%.

Other stock markets also retreated sharply. As of the time of publication, Australia’s benchmark S&P/ASX 200 fell by more than 1%; Hong Kong’s Hang Seng index opened down 1.68%, and the Hang Seng Tech index fell 2.78%.

Dow futures, S&P 500 futures, and Nasdaq 100 futures also recorded declines, suggesting that the slide in U.S. stocks on Monday may continue. As of the time of publication, Dow Jones Industrial Average futures fell 0.63%; S&P 500 index futures fell 0.62%; and Nasdaq 100 index futures fell 0.74%.

Last Friday, the Dow Jones Industrial Average plunged and entered a correction range. By the close, the Dow fell 1.73% to 45166.64 points. The S&P 500 index fell 1.67% to 6368.85 points, closing at a seven-month low; the Nasdaq Composite fell 2.15% to 20948.36 points.

Last week, all three major U.S. indexes recorded a five-day losing streak, the longest consecutive decline in nearly four years. Among them, the Nasdaq fell 3.23% over the week, the S&P 500 declined 2.12%, and the Dow fell 0.90%.

Meanwhile, international oil prices surged sharply on Monday. Both U.S. crude oil futures and Brent crude oil futures rose by more than 3%, sharply increasing market concerns about worsening inflation and slowing economic growth.

Investors are increasingly worried that sustained increases in energy costs will force central banks in various countries to maintain high interest rates, and even tighten monetary policy. The interest-rate swap market no longer expects the Federal Reserve to cut rates this year, and some investors have even started preparing for the possibility of rate hikes before year-end.

Middle East tensions escalate

The Yemen Houthi forces joined the fray over the weekend, and more U.S. servicemembers arrived in the Middle East—signaling a further escalation of the war in the Middle East.

According to reports from media outlets including CCTV News, last Saturday the Yemen Houthi forces said they had launched missiles at Israel. This marks the first time the group has directly intervened in the conflict.

On March 28 local time, a spokesperson for the Houthis, Yahya Saree, posted on the X website saying: “Yemen armed forces… for the first time used ballistic missiles to strike Israel’s sensitive military targets.”

The Houthis also said in a statement that they would continue carrying out military operations over the coming days until the other side stops the related military actions.

Farea Al-Muslimi, a researcher for the Middle East and North Africa program at Chatham House, said: “The Houthis’ decision to join a broader Middle East conflict marks a severe and troubling escalation in the situation. The potential impact on key commercial shipping routes—especially the Red Sea and the Strait of Mandeb—cannot be underestimated. At the same time, important economic and military infrastructure in the Gulf region may face increasingly serious threats.”

Meanwhile, there are reports that the U.S. Department of Defense is preparing for “a ground operation in Iran lasting for several weeks.” Sources said that if U.S. President Trump approves the plan, it would mark the war entering a new phase, with risks that could be ‘significantly higher than in the previous few weeks.’ The reports say that, currently, several thousand U.S. servicemembers—along with naval marines—have already arrived in the Middle East region.

The latest news says that U.S. President Trump stated that it is “possible” that a ceasefire agreement with Iran could be reached soon. This, to some extent, limits how much the stock market’s decline can expand further.

On the 29th local time, President Trump said that indirect talks between the U.S. and Iran conducted through the “intermediary” Pakistan have been “going smoothly.” But when asked whether a ceasefire agreement could be reached and the Strait of Hormuz reopened in the coming days, Trump did not provide specific details.

Trump said: “We have about 3,000 targets left. We’ve already bombed 13,000 targets, and there are a few thousand targets still to strike. An agreement might be reached soon.”

(China Financial News, Bian Chun)