Asia stocks tumble for third day, oil edges up as markets track Iran war

Asian stock markets fell for a third day in a row on Wednesday and oil prices edged higher as investors watch developments in the US-Israel war with Iran.

South Korea's Kospi index plunged by more than 10% after trading was halted temporarily by a so-called circuit breaker, which aims to avoid panic selling. Japan's Nikkei 225 was down by 4%, while Hong Kong's Hang Seng index fell by 3%.

Brent crude oil was about 1% higher in Asia morning trade after surging over the last two days.

The conflict in the Middle East has rattled financial markets and global energy prices have soared this week after vessels near the crucial Strait of Hormuz shipping lane have come under attack.

Around a fifth of the world's oil and gas usually flows through the narrow waterway between Iran and the United Arab Emirates (UAE), but traffic has almost entirely halted following Iran's threats to "set fire" to ships.

Traffic through the strait has almost completely halted following Iran's threats.

He said Washington will provide risk insurance "at a very reasonable price" to all shipping firms in the region to "ensure the FREE FLOW of ENERGY to the WORLD".

Stock markets have fallen sharply since the US and Israel attacked Iran over the weekend.

South Korea's Kospi is having one of its worst days in decades. The exchange was automatically halted for 20 minutes in Wednesday morning trading, as part of an emergency mechanism that is triggered by major falls and is designed to curb panic selling.

It was the first time the exchange's so-called circuit breaker had been activated since August 2024.

On Tuesday, the Kospi, which reopened after a public holiday on Monday, fell by more than 7%. Japan's Nikkei lost more than 3%, while Hong Kong's Hang Seng and the Shanghai Composite in mainland China also fell.

The UK's FTSE 100 closed 2.75% olower, while Germany and France's main indexes lost more than 3.4%.

In the US, the S&P 500 index opened sharply lower but recovered some of those losses, ending nearly 1% down.

Tehran has retaliated with strikes across the Middle East, causing major disruption to shipping and commercial flights.

The conflict has weighed heavily on the shares in export-reliant countries like South Korea and Japan, which are especially vulnerable to geopolitical shocks that put shipments at risk.