Asian Markets Stumble as Middle East Tensions Fuel Inflation Fears

Tokyo. Asian stock markets faced a downturn on Thursday as cracks emerged in the fragile ceasefire declared in West Asia. Investors remained cautious, fearing prolonged global inflation as crude oil prices began to rise again due to the tense situation between Israel and Iran and ongoing attacks in Lebanon.

There are no concrete signs that the Strait of Hormuz, a vital global oil supply route, is fully open. Energy markets were rattled after Iran maintained control over the waterway and demanded fees for safe passage. 

According to Nigel Green, CEO of deVere Group, the fact that a route accounting for 20 percent of global oil supply remains under the influence of a warring party does not signal stability. He warned that current market behavior contradicts the reality on the ground, and with missile strikes still occurring in the Gulf, oil prices are likely to rise further. As a direct result, the price of U.S. crude oil rose by 2.8 percent to $96.99 per barrel.

This market uncertainty has directly impacted Asian stock indices. Japan's Nikkei index, which climbed 5.4 percent on Wednesday, remained flat on Thursday, while the South Korean market, which rose nearly 7 percent the previous day, fell by 0.4 percent. 

The MSCI Asia-Pacific index outside Japan also saw a decline of 0.3 percent. Futures indices for U.S. and European markets also showed slight declines, signaling that the enthusiasm from Wednesday's gains is cooling off.

The biggest concern currently is inflation. With oil prices still 40 percent higher than before the conflict began, a global surge in prices is almost certain. U.S. data for February showed that inflation was already high even before the energy crisis. 

In such a scenario, the U.S. Federal Reserve is under pressure to raise interest rates to control inflation rather than cutting them. A review of the Fed's latest meeting also indicated that the possibility of rate cuts is fading.

The prospect of higher interest rates has kept the U.S. dollar stable, while the Euro and Yen have seen some volatility against the dollar. Meanwhile, in the commodity market, gold prices remain stable at $4,718 per ounce. 

Investors are now closely monitoring the actual implementation of the ceasefire and the situation in the Strait of Hormuz, as the future direction of the global economy depends on these factors.