U.S.-Iran clashes resume, Asian stock markets fall, Japanese stocks drop 1.5%, Korean stocks plunge as much as 4%

U.S.-Iran clashes resume, Asian stock markets fall, Japanese stocks drop 1.5%, Korean stocks plunge as much as 4%

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The military conflict between the US and Iran has escalated, triggering a sharp rise in global market risk-aversion sentiment, with Asian stock markets opening lower and declining across the board on Thursday.

The US Central Command announced a new round of "self-defense strikes" against Iran on Wednesday night, causing oil prices to rise nearly 2%, with WTI crude futures trading at about $92 per barrel.

Affected by this, South Korea’s KOSPI Index plunged more than 4% in early trading, the Nikkei 225 Index's drop once exceeded 2%, and the Asia-Pacific market as a whole entered risk-aversion mode. By the close of the morning session, the Nikkei 225 and TOPIX had both closed down about 1.5%, and the Korean composite index's decline narrowed to about 1.17%.

Meanwhile, US stock futures also fell during Wednesday night trading: S&P 500 futures fell 0.4%, Nasdaq 100 futures dropped 0.6%, and Dow Jones Industrial Average futures fell about 123 points, or 0.3%.

The US military strikes Iran again, risk of conflict escalation rises

According to CCTV News, on June 10 local time, US Central Command reported that, starting at 5:15 p.m. EST on the 10th, US Central Command forces launched so-called "self-defense strikes" against multiple targets inside Iran. Iranian state media reported that Iran had launched missile and drone attacks on US ships in the Strait of Hormuz.

Earlier, Trump had issued a tough warning on the situation, saying Iran was "dragging out the negotiations on a potential deal for too long" and would "pay the price," threatening the US would "launch a fierce strike" against it. This stance has further endangered the already fragile US-Iran ceasefire agreement, raising fears in the market of a total loss of control over the Middle East situation.

Asia-Pacific stock markets under pressure, Korean stocks leading the decline

The Asia-Pacific market suffered broad-based selling at Thursday's open, with the Korean market experiencing the most significant decline. The KOSPI once fell 4.1% in early trading, while the small-cap KOSDAQ index dropped 2.8%.

In Japan, the Nikkei 225 Index's early losses expanded to 2.3%, and the TOPIX Index fell 1.9%. The Australian S&P/ASX 200 Index dropped about 0.97%. Hong Kong Hang Seng Index futures stood at 24,307, below Wednesday’s close of 24,407.96.

As trading continued, some markets pared their losses. By the close of morning trading, the Nikkei 225 and TOPIX both closed down about 1.5%, while the Korean composite index, after turning positive, fell back again with a latest decline of about 1.4%.

Prior to the Asia-Pacific open, US stocks had already taken a heavy hit during Wednesday's trading session. The Dow Jones Industrial Average plunged 953.33 points, down 1.87%; the S&P 500 fell 1.62%; the tech-heavy Nasdaq Composite dropped 1.98%, with the chip sector again leading the losses. Software giant Oracle dropped more than 11% after hours, after announcing plans to raise an additional $20 billion via stock and debt offerings to support AI infrastructure construction.

Accelerated sector rotation, investors seek tech hedges

Amid market turmoil, some investors have begun actively adjusting their portfolio structures. Victoria Fernandez, chief market strategist at Crossmark Global Investments, said more and more investors are looking for ways to hedge their technology trades.

"I think people are asking, where can we go to hedge tech trades? What is the opposite of momentum and beta?" she said. "We are seeing funds rotate out of the tech sector and into areas that have pulled back in recent months." Fernandez added that her clients are allocating more funds to pharmaceuticals and biotech in healthcare, as well as finance and energy sectors.

As geopolitical risks continue to mount, investors will also be watching US economic data closely on Thursday. The US May Producer Price Index (PPI) will be released Thursday, with economists surveyed by Dow Jones expecting a month-on-month increase of 0.7% and core PPI excluding food and energy up 0.5%, both lower than April's 1.4% and 1% increases, respectively. In addition, initial jobless claims for the week ended June 6 will be published Thursday morning, giving investors an update on the latest conditions in the US labor market.

Risk Warning and DisclaimerThe market has risks, and investments should be made cautiously. This article does not constitute personal investment advice and does not take into account the special investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article suit their own situation. Investments made accordingly are at one’s own risk. ```