Airline stocks led losses in Asia on Monday as Middle East airspace disruptions and airport closures unsettled travel markets, while higher oil prices lifted energy shares amid escalating conflict in Iran.
Singapore Airlines fell more than 6%, pacing sector declines. Japan’s ANA and JAL each dropped over 4%, while Hong Kong’s Cathay Pacific slipped 3.63% lower. Australia’s Qantas and Taiwan’s Eva Air also declined more than 4% as investors weighed higher fuel costs and operational disruptions.
Oil futures also surged as the U.S.-Israel conflict with Iran escalated following the death of Iranian Supreme Leader Ayatollah Ali Khamenei.
U.S. President Donald Trump said Sunday that combat operations in Iran will continue after three U.S. servicepersons were killed.
Oil futures initially jumped 8% before trimming gains to about 4%. West Texas Intermediate futures last traded at $69.68, while Brent crude was at $76.13 per barrel. Gold futures jumped 2.3% as investors piled into the global safe haven.
Energy stocks in Asia advanced on higher crude prices. Woodside Energy in Australia, Inpex in Japan gained as much as 5%, while China National Offshore Oil Corporation in Hong Kong rose more than 3%.
Defense stocks in the region also rose, though more modestly. Japan’s Mitsubishi Heavy Industries, Kawasaki Heavy Industries and IHI rose 0.47% and over 2%, respectively. Singapore’s ST Engineering climbed 3%.
Other major Asian defense stocks were not trading Monday because markets in South Korea were closed for a public holiday.
Japan’s Nikkei 225 slipped 1.25%, paring earlier losses, while the Topix fell 1.24%.
Hong Kong Hang Seng index was 1.58% down, while mainland China’s CSI 300 was down 0.1%.
Australia’s S&P/ASX 200 fell 0.22%, with losses partially offset by gains in its oil and gold mining sectors.
Stock futures tumbled in overnight trading after the weekend strikes in Iran. Futures on the Dow Jones Industrial Average dropped 517 points, or 1%. S&P 500 futures lost 1% and Nasdaq 100 futures declined a little more than 1%.
Source: CNBC