Asian markets close lower as geopolitical tensions and higher oil prices weigh on sentiment

Major Asian indices close in negative territory

Asian stock markets ended Thursday, June 4, 2026, mostly lower as investors reacted to growing geopolitical uncertainty and a more cautious global risk environment. The main benchmarks closed around the following levels:

1. Nikkei 225 (Tokyo): 67,470 points (-1.36%)
2. Hang Seng Index (Hong Kong): 25,268 points (-1.43%)
3. Shanghai Composite: 4,058 points (-0.64%)
4. Kospi (Seoul): roughly -1.8% during the session, making South Korea one of the weakest regional performers.

Technology, industrial and cyclical stocks led the decline, while defensive sectors showed greater resilience.

Geopolitical tensions and oil prices drive market moves

The main catalyst behind the sell-off was renewed concern over developments in the Middle East. Escalating tensions involving the United States and Iran increased fears of disruptions to global energy supplies and potential consequences for worldwide economic growth. Reuters reported that investors shifted toward safe-haven assets as geopolitical risks intensified. Key factors influencing markets included:

1. escalating U.S.-Iran tensions;
2. oil price volatility;
3. concerns about inflationary pressures;
4. growing global risk aversion;
5. stronger demand for safe-haven assets such as gold and the Japanese yen.

Brent crude remained close to $97 per barrel after recent gains, continuing to raise concerns for energy-importing Asian economies.

Latest economic developments

Investors also continued to assess the outlook for monetary policy among major central banks and the implications of recent U.S. economic data. Additional factors affecting sentiment included:

1. the end of Wall Street's recent rally;
2. higher U.S. Treasury yields;
3. concerns about global growth prospects;
4. disappointing signals from parts of the U.S. technology and semiconductor sectors.

In Japan, market participants remain focused on potential interest-rate decisions by the Bank of Japan, while in China investors continue to watch for further economic stimulus measures and support for the property sector.

Overall, Asian markets closed the session on a cautious note, reflecting increased geopolitical risks and ongoing uncertainty surrounding the global economic outlook.

Andrea Pelucchi