Oil Prices Returning to $100 Pressure China, Japan, Korea Stocks; Market Refocuses on Strait of Hormuz Risks

TradingKey - Affected by renewed tensions in the Middle East, Asia-Pacific stock markets closed generally weaker today, with performances in China, Japan, and South Korea diverging but broadly under pressure.

According to TradingView data, the Shanghai Composite Index closed at 3,988.56 points, up slightly by 0.06%; the Shenzhen Component Index closed at 14,407.86 points, rising 0.69%, while the ChiNext Index finished 0.8% higher.

In contrast, the Japanese stock market weakened, with the Nikkei 225 Index falling 0.62% to close at 56,571.50 points; the South Korean market saw a more pronounced decline, as the KOSPI dropped 0.86%, extending market concerns over energy shocks and external uncertainties.

The direct factor driving the weakness in Asia-Pacific markets today remains the rapid rebound in crude oil prices and escalating risks in the Strait of Hormuz.

Following the collapse of U.S.-Iran negotiations, the United States announced it would impose a naval blockade on Iranian ports, WTI crude oil briefly climbed back above $104 per barrel, and Brent also reclaimed the $100 per barrel mark. Rising oil prices not only fuel inflation expectations but also directly suppress the risk appetite of energy-importing nations like Japan and South Korea; thus, the pressure on the Tokyo and Seoul markets was more evident.

In terms of sector performance, transportation, shipping, and aviation stocks were the primary drags today. WSJ reports show that, hit by geopolitical risks and rising oil prices, stocks including Cathay Pacific, China Eastern Airlines, Cosco Shipping Energy Transportation, and Hanwha Ocean all pulled back.

Overall, there was no panic selling in the Chinese, Japanese, and South Korean markets today, but the market has clearly entered a "risk repricing" phase, with capital increasingly avoiding sectors sensitive to high oil prices in favor of defensive assets.