US-Iran Conflict Escalates: Asia-Pacific Stocks Slump, Oil Prices Surge, Energy Stocks Rise, and Airline Stocks Hit Hard

On Monday (March 2), the conflict between the U.S. and Iran continued to escalate, leading to a broad decline in Asia-Pacific stock markets.

Japanese stocks ended a four-day winning streak, with the Nikkei 225 Index closing down 1.35% at 58,057.24 points, and the TOPIX Index closing 1.02% lower at 3,898.42 points. South Korean markets were closed today.

In Taiwan, the TAIEX Index briefly fell below the 35,000-point mark intraday before finishing 0.9% lower at 35,095.09 points.

Hong Kong stocks also declined, with the Hang Seng Index at one point losing the 26,000-point level before narrowing its losses to close down 2.14% at 26,059.85 points. The Hang Seng Tech Index broke below 5,000 points, ending 2.89% lower at 4,989.37 points.

China's A-share indices showed mixed performance, with the Shanghai Composite Index rising 0.47%, while the Shenzhen Component Index fell 0.20% and the ChiNext Index dropped 0.49%. The oil and petrochemical sector strengthened broadly, as the "Big Three" oil companies—CNOOC, PetroChina, and Sinopec—hit the daily price limit collectively at the close for the first time on record.

The sectors experiencing the most significant volatility on Monday were energy, gold, and airline stocks.

Amid concerns over oil supply prospects, international oil prices surged more than 10% in early Asian trading. As of press time (3:40 AM ET), WTI crude oil futures were up about 8%, while Brent crude futures gained approximately 8.5%.

Driven by rising oil prices, Asia-Pacific energy stocks climbed. Specifically, Australia's Woodside Energy, Japan's Inpex Corp, and CNOOC's Hong Kong-listed shares all rose by more than 5%. Asia-Pacific defense stocks also gained.

Boosted by safe-haven demand, gold prices (XAUUSD) broke through the $5,400 mark, rising over 2% intraday. Gold stocks also bucked the trend to rise; in the A-share market, Western Region Gold, Sichuan Gold, and Hunan Gold all hit their daily price limits.

Airline stocks fell broadly as airspace disruptions and airport closures in the Middle East unsettled the market. Singapore Airlines shares dropped more than 6%, leading declines in the Asia-Pacific aviation sector. Japan's ANA Holdings and Japan Airlines also saw their share prices fall by more than 4%.